Life Insurance
Federal Laws

Your parents took out life insurance policy on you as child. You just found out at age 50. The beneficiary is parents and then sister-not 4 kids or husband. Do you have a say in this?


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2008-07-12 22:33:20
2008-07-12 22:33:20

Nope. They purchased it when they had the ability to contract and they determine the beneficiaries. You can always purchase your own life insurance with your own money and name your own beneficiaries.

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Actually the odds could be 100% if the woman's husband owned three different life insurance policies naming her as the primary beneficiary for each of the policies. Or, perhaps her parents each owned life insurance policies, as well, and named her as the primary beneficiary.

If you are the named beneficiary of their life policies you do. You can call and ask the insurance companies who the beneficiary is and they will tell you that much. I presume your question had to do with claiming the death proceeds as income. If so, the answer is NO! Life insurance proceeds are received income tax free.

Yes, an insured and a beneficiary have to have an insurable interest to be able to have a life insurance policy. Parents/children are considered to have insurable interest

Once an insurance company (insurer) receives a valid proof of loss (claim form), the insurer will begin the process of contacting beneficiaries of any life insurance. The insurer will first contact the primary beneficiary. If unable to locate the primary beneficiary, or if the primary beneficiary is dead, the insurer will then move to the contingent beneficiary (second beneficiary). If the insurer has no response to the contingent beneficiary, the insurer then moves to the tertiary beneficiary (third beneficiary). Failure here will force the insurer to pay any life proceeds to the estate of the decedent, which can open the claim to the creditors of the decedent in most states. More than 40% of life insurance policies in America have no named beneficiary! Failure to name the beneficiary can leave your loved ones in a bind. Always name your beneficiaries. List one or more in each category (primary, contingent, tertiary) too. Most people name their spouse first, children as contingent, and parents or siblings as tertiary.

A husband can buy a life insurance for his wife. Husband becomes the proposer and he is also the beneficiary in case of any unfortunate death of wife. Similarly a working wife can also propose a policy for her husband. Father or mother can take out a life insurance policy for their children. Children cannot take out life insurance policy on their parents name as there is no insurable interest for them to do so. Almost anyone with relationship interest can be the owner of someone else's life insurance policy. The further removed the proposed owner is form the insured, the harder it will be to explain ownership. Note that corporations can also be the owner of policies.

Life Insurance cannot be purchased on someone that is not aware. They do have to sign paperwork and the beneficiary must have a insurable interest. This prevents anyone from taking out insurance on someone and signing themselves as the beneficiary. When the child is concidered an Adult, they are responsible for getting their own. Unfortunately this is the case.

Any life insurance policy has a "beneficiary" - the person who gets the money when the insured person dies. If your ex-husband is still your beneficiary, then he gets the money if you die. If you don't want your ex to get the dough, then you ought to change your insurance policy to name someone else - your new boyfriend, your kids, your parents, your best friend from elementary school - whoever you want to get the money when you cash in your chips. Everyone - married, divorced, living together, EVERYONE - should review their wills and life insurance policies at least every few years to make sure that they are still correct. And correct them if they are wrong.

As long as the husband enrolls the wife and vice versa you will have what is called secondary coverage. Now the husband will be his own primary and the wife will be secondary and the wife's plan will be her primary and the husband her secondary. In the case where there are any dependant children that are enrolled in both plans the older of the two parents will carry primary and the younger parent will be secondary.

I assume that you are referring to the unfortunate circumstance of the dealth of a child. An insurance policy, including a life policy, is a contract between the insured and the insurer. The insurer promises to pay a sum of money to or on behalf of the insured or his/her designee (the beneficiary) upon a determinable event (sometimes called a "contingency"). With a life policy, that event is the death of the named insured for a reason that is not excluded from coverage. The insurance policy will designate a beneficiary to whom the proceeds are payable. Therefore, absent other facts that you have not stated, the insurer will pay proceeds only to the named beneficiary.

You've got it backwards. A beneficiary is the person who has to have an insurable interest in the insured, and that is standard insurance law, in North Carolina or anywhere else. In order to take out insurance on anyone you must have an insurable interest in that person. That does not mean you must have an insurable interest in the beneficiary. Some states do and some states do not. My question is does NC require an insurable interest in the beneficiary? OK, since you are still questioning this, here is the more detailed answer. A beneficiary, by definition, is not being insured; instead, he or she is the person who will receive the insurance payment (in the case of life insurance) when the insured person dies. Since the beneficiary is not being insured, there is no reason why anyone would be required to have an insurable interest in the beneficiary. The reason why insurable interest is required, is that life insurance is not intended to be a form of gambling, otherwise anybody could take out an insurance policy on anybody else. Insurable intersest means that you personally would be financially harmed by the death of a particular person. Children depend upon their parents and therefore have an obvious insurable interest in their parents. Even if the child has grown up and no longer depends upon the parent, that child still has an insurable interest in the parent, because when the parent dies, the child will probably have to pay for the funeral, and will have other expenses relating to that death. Whereas, if you wanted to take out a life insurance policy on a complete stranger, you have no insurable interest. An employer can take out life insurance on an employee, called "key person insurance" if it is thought that the death of that employee would cause financial problems to the company that employs him or her. The star of a motion picture would normally be insured by the movie company, since the death of that person could make it impossible to finish filming, and the money invested up to that point could be lost. That's how insurable interest works. The beneficiary HAS insurable interest in the insured, the insured does NOT have an insurable interest in the beneficiary.

That depends on weather or not your 17 year old has their insurance on the parents policy. It will go up if the child is on the parents policy, but if the child has their own policy, it won't. But it will be cheaper if the child is added on to the parents policy. My husband is a North Carolina State Trooper so I know alot about insurance. Also, call around and go online for the cheapest rates.

An adult single child may name anyone they choose to be their beneficiary, if they own the life insurance policy. Some people you may want to consider would be anyone you are related to, someone who depends on you for financial support, a charity, your parents, siblings, or relatives.

If they are elderly parents, Yes. But if you are under 40 you cannot put life insurance on your parents.

You may take out an insurance policy on your parents if you have power of attorney over them.

If the divorce decree states that life insurance must be held naming the ex spouse as beneficiary (and any other conditions), then the ruling lasts until another court ruling. You are out of luck if you didn't get it added to the divorce decree in the first place. However, if you are parents of young children, it would serve you both well to hold a life insurance policy naming the other as beneficiary.

No, The insurer provides a means by which we can assign beneficiaries, If those beneficiaries turned out to be your parents then so be it. Without evidence to the contrary, Namely an assignment of proceeds AKA naming you as a beneficiary, the law has no option but to presume that was the intent of the insured. Their is no negligence here on the part of the Company and therefore no liability. The insurance company is only following the law as well as the documented intent of the insured.If you think there was an oversight on the part of your sibling in the assignment of beneficiaries, then you would need to bring your action against the beneficiary and/or the estate of the deceased. Basically you'd have to sue your parents and your brothers estate. The Insurance company would not be a party to your recourse action.

Usually no, you can ask for a trust to be set up in the event that the non custodial parent dies, but you can not require a life insurance policy to be created with the child as the sole beneficiary. In this case, the non-custodial parent can choose anyone they want to. If you are worried about the noncustodial parent dying, I would suggest asking for a trust to be set up. he/she is not required to do it, as I have never heard of a court requiring that.Another PerspectiveLife insurance is usually made a part of separation agreements when the parents are represented by competent counsel. It is not unusual at all for custodial parents to be concerned that life insurance be maintained with the custodial parent or child being the beneficiary. Even if the parents divorce, the child should enjoy the benefits of having two parents since they brought her into the world and are responsible for her support. Whenever possible a minor child should have the benefit of life insurance to pay for support and education expenses in case either parent dies unexpectedly.

NO. Your question is a bit confusing. First you state their is no beneficiary but then indicate the parents may be the beneficiary. Normally life insurance proceeds do not go through an heirs probate process. Life insurance goes directly to the designated beneficiary outside of any probate process unless no one has been designated or the designated beneficiaries are themselves deceased. If there is no designated beneficiary at all, the life insurance will default to the estate of the deceased for probate and apportionment to the heirs. If there are 2 equal 50 percent designated beneficiaries and one rejects their 50 percent portion, that 50 percent will be assigned to the estate of the deceased for probate and then be apportioned to the heirs of the deceased. An heir can assign his or her inheritance to another heir if they so choose. If the heirs reject the proceeds of the life insurance disbursed by the estate and then also decline to assign it to another heir, then those proceeds will default to the government.

make my parents understand that my husband is my life and i cant live without him,i know everyone's parents will be happy if their children are happy

Ask your insurance company. It is likely that you parents will need to be the owners.

You have to check with the specific insurance company about the terms of your parents' plan.

I think the wife's insurance is primary.

A beneficiary of a life insurance policy is not required to sign the policy or the designation of beneficiary portion of the application for insurance; the insured signs the application for insurance and designates the beneficiary. The proceeds of a life insurance policy are not payable by the insurer until the death of the insured and upon the submission of documentation specified by the insurer.As stated in the preceding answer, if the primary beneficiary is no longer alive, proceeds are payable to the contingent beneficiary named on the application.Keep in mind that a claim must be made for the proceeds; ordinarily the insurer would not know that the insured has died unless a claim is made. However, the law of many states require that life insurers make a periodic diligent search for insureds to determine whether they are living or dead. This can include a search of public records (such as Estate proceedings) or in some cases, obituaries. If it is determined that the insured is dead, the insurer will then be required to make a diligent search for the named beneficiaries. The beneficiaries may be, for example, the persons in charge of administering the Estate. If so, contact will be made by the insurer and the proceeds can be paid. There are other permutations that are possible, but these are some basics.

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