Can an ex-spouse draw life insurance benefits?

Submitted by Anonymous (not verified) on Sat, 12/06/2008 - 15:25

My boyfriend's father died in August. His divorce was finalized from his ex-wife in April. Apparently, he never changed her as the beneficiary on his life insurance policy. My boyfriend and the siblings really didn't care, because they didn't have the money to begin with-so what would it matter if they didn't have it now.....however the ex-wife agreed to split the insurance money 5 ways--believing it was only fair and she had a decent relationship with all the kids/grandkids. My boyfriend and his siblings had a letter drafted by their lawyer stating that the ex-wife agrees to split the life insurance money and she signed it. It was sort of her suggestion. After all, their dad divorced her (and on a side note, his reasons for divorcing her had something to do with him pulling his retirement out early upon her suggestion so that she could place some money in an acct that would draw interest and some in the bank acct to pay bills with, only to find out that the money disappeared and she began using his credit card to pay for bills, subsequently causing my boyfriends dad to file for bankruptcy). My boyfriend got a letter in the mail yesterday from his step-mom stating she's going to be keeping all the insurance money basically because she feels entitled to it. She rattled off a list of things she has done that are only simply things a nice person would do without payment. (claims she paid his cell phone bill for a year, a gas bill in 2/08, their joint tax return in 2007, and has been feeding the cats since his death and mailing his mail to my boyfriend's sister. It's so ridiculous....however, my question is this.

Can she get away with this if she signed a notarized document stating she agreed to split the insurance money? After all, they were divorced and it was more than likely an oversight on his part. Also, would something like this be suitable for civil court and how long should it take???

Thanks all.

Posted: 07 Dec 2008 01:50 Post Subject:

Can she get away with this if she signed a notarized document stating she agreed to split the insurance money? After all, they were divorced and it was more than likely an oversight on his part. Also, would something like this be suitable for civil court and how long should it take??? thanks all.

First off Stef, I'm sorry your boyfriend lost his father...secondly let me ask a few questions...was this life policy thru his dad's employer or was it a private policy? What state are you in? Are there 4 children is that right? How much are we talking about here? Have any of the children contacted an attorney? What about all of Dad's personal property and estate?

Posted: 07 Dec 2008 05:05 Post Subject: insurance

I have a Life Insurance policy through the military. My Beneficiary is my BEST friend ( and POA). As I read some of these threads/posts, I starting to believe ( I think..really don't know for sure..) that my Beneficiary can be 'challanged' on my decisions, on what my Life Insurance says. I don't know if ANYONE has the 'ground' to do this, however. I wouldn't think they do. But...it's my EX and my EX-in-laws who I don't trust. Any advice?

Posted: 07 Dec 2008 11:27 Post Subject:

SD I think you're fine and locked solid..of course anyone can challenge anything..it's whether or not they would suceeed, and in your case I think your golden.

In the OP's case it may be different, and the reason I ask if it was a policy at work...'some' states (mine as an example) if an 'ex' spouse is left as a beneficiary it is assumed the insured 'forgot' to change it....'if' there is another spouse, or natural children....when my brother died, he had INTENTIONAL left his ex as beneficary, however he didn't know that he needed to fill out a form that in fact said, 'yep i REALLY DO MEAN to leave my ex as beneficary'...we solved it (in our family) easily because my dad, and stepmom and my sister and i signed off that we were not contesting anything (had to do this for his 'estate' as well)...now could we in this case have challenged it? of course, he left two minor daughters. what kind of moron would take 'food' out of their mouths? :roll: would we have been successful, I doubt it I would think his girls would come in first ahead of parents or siblings...anyway...'i' think you're safe, but gary, ins. teacher, investigator or another senior agent would be able to give you better advise i'm sure...hopefully they will be along directly

Posted: 07 Dec 2008 02:01 Post Subject: insurance

LORI.........I have another question for ya. Yep...I DO have a Will and a Life Insurance, through the military. My Will is just a 'general' one......just that my POA takes care of bills, etc. ..nothing 'specific' ( who I leave what to). My Life I nsurance is 'self-explanatory'. Do you think I should get a 'Civilian Will' to state SPECIFIC' things ( what goes to who, etc.)? Also.................(if you know..) even if I AM divorced, ( GOD FORBID!!) if anything happenes to me, my son will probably live with his dad. Well, as you know, from some of my posts, I don't trust my EX. Can I SPECFICALLY state that my EX can't do certain things without my POA's permission? I mean can't touch my son's Life Insurance, can't move out of state,etc? I hope my question is 'clear' to you.

Posted: 07 Dec 2008 10:36 Post Subject:

As you know SD I'm no lawyer (I was though only about 6 credits short of a paralegal degree, but that ain't worth much :roll: )...I doubt you could prevent him from leaving state...you certainly could say who gets what etc. And what you're wishes are ..but if you've left your friend as beneficiary a will doesn't change or trump that..in truth without a trust, she could take the money and do with it what she will. (not saying that would happen you know that just that she/he 'could'). You might want to check to see if that 'service' will is only good as long as you are active military...when you say 'touch his life ins.' do you mean the policy ON your son or FOR your son? if you mean 'for' your boy, meaning your policy, he can't touch that anyway because you have another beneficary. If you mean the policy you have on your son's life...who would care about that? or do you mean you'd be afraid he'd cash it in? I'm sorry I don't think I'm clear on what you would want to say and not say (in a will)..sorry maybe explain it deeper.

Posted: 07 Dec 2008 11:39 Post Subject: insurance

LORI............................I mean can my EX try to get the money, in the Life Insurance, that is FOR my son? I don't think he can. My POA, who is my BEST friend......I'll tell ya I trust her with my life!! I've known her a very long time. She was my POA when I went to Kwiatt and Iraq. She took care of everything. She e-mailed me when she was taking money out for bills, for my son, etc. She IS wonderful!! My Will, through the Military, is 'valed' anywhere. It's jusy a very 'general' one (ie..POA gets possesions of this or that and 'distributes' items to my family,etc.) To answer your question, yes...the Will and Insurance is ONLY good while I'm in the Military. However....I don't plan on getting out anytime soon.LOL TOO many benefits!!LOL Especially for my son.

Posted: 08 Dec 2008 11:33 Post Subject:

Stefanie, lets put it this way, since her husband hadn't changed the beneficiary status even after the divorce, she will remain legally the beneficiary of the policy. And, the insurance company will recognize her beneficiary status only. So, this can't be challenged legally.

However, she is kind enough to agree to distribute the life proceeding with the other living descendents of her husband. And, since the letter was drawn by an attorney that she had signed, she can be legally challenged in the court of law for not acknowledging the letter.

Posted: 08 Dec 2008 11:36 Post Subject:

Your ex couldn't touch any money you've left to your beneficary....so there's nothing to worry about there...and unless and until your will is no longer valid (you are out of the military) that will stand up as well..when you were gone did your boy stay with his father? were there any 'money' issues then? Just be very careful that if there comes a time that this policy or will is no longer valid that you make the proper arrangements...also are you saying once you leave the military you no longer have life ins.? if so you better get to thinking about getting a private policy while you are young..(how old are you anyway?) and the rates would be lower....the other agents could advise you on the best bet for you....remind me again your son is what? 10 or so?

Posted: 08 Dec 2008 11:38 Post Subject:

So, this can't be challenged legally.

yeah jeorge it can be challenged, and dependent upon the type of policy and state laws, it might be an easy win.

Posted: 09 Dec 2008 07:41 Post Subject: insurance

LORI...........i DID find out, if I choose to get out of the Military, I CAN keep the Life Insurance, but, i would have to pay out of my poket to do this. Right now, I pay $27.00 per month for it. However......if I'm 'out', the payment will be ALOT more. When I was gone, my son stayed with his dad. However............the 'decsions' that were made ( financially, needs of my son, etc.) had to be 'AGREEABLE' with BOTH my EX AND my POA. Ya see..........my EX is not the most resonsible person in the world. I'm sure you can gather that by previous posts. :roll: For example...if my EX told my POA he needed something for my son ( and I KNOW my EX would want something out of it, too..) my POA would go get whatever my son needed. She (POA) wouldn't give the cash to my EX because I know the cash wouldn't go to my son, my EX would spend it. This 'arrangement' was in writing, attached to my Will and Life Insurance. All of my utility comoanies, bank,etc. had a copy of the POA. My EX even had the nerve to try to go to the bank and get money out of my SON'S account. Ya see........BOTH my EX and my son have the same name. My EX went in and said "this is me and I want money out of my account." The bank knew the circumstances with me being gone, etc. The bank ALSO had a copy of the POA AND a copy of my son's Birth Certificate to 'seperate' the two people: EX and my son. Thsi is a small town I live in.....everyone knows everyone!! :D Anyway......the bank called my POA AND e-mailed me ( was still overseas then..). My POA went to the bank and took care of it. After I left, my EX even tried to go to a lawyer and told this person that I "up and abandon my child and no one knew where I was." Talk about sneaky!!! My EX was ALSO stupid enough to tell the lawyer to call my POA and she would have the 'same story'. YEA...RIGHT!! My POA had copies of EVERYTHING!!! The whole thing was crazy!! KNOW you see why I'm so 'concerned' about my EX doing nasty stuff do get what he wants. My son is 15 (now). THEN...when I left, my son was 9. Was gone 15 months.

Posted: 09 Dec 2008 08:11 Post Subject: insurance

OOpps!! Forgot to tell ya ,LORI.........I'mm 44 years old. I'll turn 45 THIS month. ( Happy B-day to me!! :D )

Posted: 09 Dec 2008 12:20 Post Subject:

Fortunately you only need to 'make it' 3 more years ! :wink: :lol: you know what I mean then you can make your son the beneficary if you chose and your ex can't even try and get ahold of anything unless he can talk your son out of it....

You might want to check (quickly) on private life policys...i'm sure the agents can let us know the ages when premium changes, ie, is it cheaper for 44yr old than 45? or 49 rather than 50 I know that one is older than the other, but i thought maybe it was structured, as an example 40-44 is this much then 45-49 this much etc...anyway wouldn't be a bad idea to start thinking about getting something else...but weigh that against what your military premium would cost you as a private citizen...that may still be lower because it's a group policy...

on another note, and i don't want to scare you but i have know some crappy parents that have done this when their son was a JR. have you ever ran a credit report on your son to make sure that ex hasn't taken anything out in your boys name (ss#)...just something to keep an eye on (and worry you sorry)...since your ex is such a sneaky greedy mother...you've probably already thought of this...my poor daughter in law didn't find out till she was about 19 that her 'mom' had actually put utilitys in her name (yes they have the same first name :roll: ) when she was like 9 years old, then of course didn't pay the bills, it was a mess to sort out, also had defaulted on a cc and loan...bad bad bad, i can't imainge doing something to your child... :shock: :x


Well I'll turn 49 this month! (23rd-also my wedding anniversary best birthday gift i ever got!)...

Posted: 10 Dec 2008 06:22 Post Subject: insurance

Actually.........YEP...I HAVE checked to see if my EX has used my son'd name for anything. I've come up with nothing..so far. Yep...I'm "old" ( LOL) according to my son. :lol: I've been looking into policies..that's for sure. I don't know if I would want to put JUST my son's name as Beneficiary. Not that I don't trust him...just I ALSO want an 'adult' figure, as well...and NOOOOOO , not my EX. My son wouldn't be 'mature' at 18 years of age..ya know? Lots to think about...that's for sure.

Posted: 20 Apr 2009 12:43 Post Subject: life insurance beneficiary

how long does it take to change your benificary on your military life insurance policy

Posted: 20 Apr 2009 04:12 Post Subject:

with the proper consent of the policy owner it can be changed within a few days.One just need to feel out one form in order change the beneficiary.
follow this link for more information.

http://www.insurance.va.gov/miscellaneous/choose.htm

:arrow: :arrow:

Posted: 20 Apr 2009 10:20 Post Subject: insurance

how long does it take to change your benificary on your miltarylife insurance policy

Only the Military person can change the Beneficiary. He/she can go to their UA (Unit Administrator) and ask for the Beneficiary to be changed. The UA will give you the paperwork to fill out. It takes just a few minutes. As soon as you change it, the information is automatically updated in the Military personel's file.

Posted: 20 Apr 2009 11:25 Post Subject:

Hey Snoop, you may need to contact the MPF or the DEERS for the beneficiary change purpose. As the other have also mentioned you are required to fill-in the required paper work and submit it to the concern department.

However, who do you want to name the beneficiary on the policy? The Military life insurance would inform the spouse (when she is the beneficiary) regarding the change in the plan.

Posted: 20 Apr 2009 11:19 Post Subject: insurance

That's true......I forgot about that. The spouse WILL be informed. I would talk to your Chain of Command about the issue. DEERS: something else ( I forgot to say..) if you change your Beneficairy. DEERS concerns benefits, etc.

Posted: 03 Dec 2009 04:40 Post Subject: ex wife

I have an insurance policy that I have been paying on for 13+ years on my ex husband. We have a child together. If he were to pass, will I be able to cash his policy in? Can I get death certificate and from whom? I understand that the insurance company needs that to get the money.

Posted: 03 Dec 2009 07:38 Post Subject:

Anonymous2u . . .

Depending on the state in which your ex-husband dies, you may or may not have the ability to get a "certified" copy of the death cert. Your child will have an absolute right to obtain one as a blood relative. The death certificate comes from either the city, county, or state where the death occurs. In Texas, for example, you may have to request the cert through the mortuary that files it with the city or county.

In California, an "interested" party (such as an employer or business partner) who is not a spouse, ex-spouse, child, parent, or sibling may obtain an "informational copy" of the death certificate from the county of record through the state. While not a "certified copy," it is acceptable to the insurer for purposes of paying a death claim. It may not be acceptable to some creditors for the purpose of cancelling a debt.

Photocopies of an original certified copy are almost always unacceptable for filing a death claim. And death certificates from Haiti, the fraudulent death claim capital of the world, are suspect before they arrive -- even if accompanied by "the videotape of the funeral procession" you can get for $20. There are so many copies of that video in the possession of insurance companies, it's not funny anymore. But it's an genuinely hysterical tape to watch!

As for your ability to "cash his policy in," that depends entirely on whether you or your child (who I assume is in your care) is the beneficiary. You may be paying the premiums, but if you're not the owner, you may not even be the beneficiary.

Do you know who the owner and beneficiary are? If both are you, then you'll have your death claim check in about two weeks from the time the properly submitted death claim is received by the company. It could take several weeks to receive the death certificate before you may file the claim. At least, you should notify the insurer of his death, when it occurs, so they can send you the claim form and open a file in preparation to receive it.

Posted: 04 Dec 2009 11:57 Post Subject: life insurance

I guess I'm putting in my '2 cents' in here: why would you WANT to pay on an Life Insurance policy on your ex? I'm not saying it's a 'wrong' thing to do, but,..I guess I never understood why people do this. Can you give me some more 'insight' please? I'm very curious.

Posted: 04 Dec 2009 03:39 Post Subject:

sdchargersfan . . .

The concept is not that difficult or unreasonable. Let's say you and your spouse each own $500,000 of life insurance on your own lives, and have named each other as primary beneficiaries. You're living happily ever after, but something happens along the route and you decide to go your merry ways, and for sake of discussion, amicably.

But, in doing so, you have some major outstanding joint debts and agree to split them and each be responsible to pay them off (or have other obligations, like children who are still several years away from adult status and/or graduation from college) -- understanding that the joint obligation cannot be severed. Neither of you is interested in taking the bankruptcy route to debt elimination, but it will take a number of years to pay these debts off. At least there's enough money in the death benefit of either policy to provide the necessary funds.

How do you prevent your ex-spouse from cancelling the insurance and sticking you with the entire debt you thought they were going to pay, and which would be paid by the proceeds of their life insurance?

Three main ways: First, be named as the irrevocable beneficiary (usually reserved for naming a trust or charity as beneficiary), in which case you could legally force your ex- to maintain the policy. Second, agree to pay each others' premiums to ensure that the policies remain in force until the remaining obligations are no longer a concern (but you're powerless to prevent them from taking you off as beneficiary, which makes you NUTS for choosing to pay their premiums).

The third way is perhaps the best, just assign ownership of your own policy to them, and they assign theirs to you. As owner, you are unlikely to name someone else to receive the proceeds before your obligations have diminished (other than as a collateral assignment of policy proceeds to a third-party you owe money to, which does not make them a beneficiary).

[Note: If a large amount of alimony is involved, a good lawyer might recommend that you agree to pay the cost of your ex's life insurance within the total alimony payment, so at least you get a tax deduction for the amount of premium you're paying, which is not otherwise deductible (your ex will pay the tax). May not make you happy, but it's a valid reason, even if you are no longer the beneficiary.]

So how do either of you know you're going to receive the proceeds when the other dies. Simple, you're paying the premium to keep the policy in force. If you choose to stop paying, you understand that there may be no money to collect following the insured's death.

As the owner, if it's a cash value policy, you could also borrow the cash value along the way and use it to pay off some of all of your obligations, or throw a party, or whatever you choose to do with the money, understanding, however, that by doing so you diminish the death benefit by the same amount plus interest on the life insurance loan.

Once the debts or obligations are no longer a concern, you both reassign the policies back to each other, and you choose whether you want to keep your own insurance in force or not. If you do, you pay the premiums, if you don't, you surrender the policy.

The only way to be certain that the life insurance proceeds will be there if needed is to continue paying the premiums. Makes no difference who the owner is. Life insurance is simply, "I pay, I die, You pay," (or "You pay, you die, they pay," same thing).

It's not any different from the party who holds title to your automobile (let's say its a $300,000 Lamborghini that you still owe $250,000 on -- nice ride!), and who buys a $300,000 decreasing term policy for the 5 years you're financing the vehicle -- guaranteeing that they'll collect the balance on the loan if you are killed cranking that 'ghini at 180mph on some stretch of road somewhere. They could choose to include the cost of insurance in your financing (usual method) or they could pay it on their own (this is the NUTS part that is throwing you off).

Why would they want to pay the premium instead of making you pay it? To be sure it gets paid, so they'll be able to collect the benefit.

That's the reason why credit life insurance policies (on cars, motorcycles, boats, airplanes) are normally purchased with a single premium. No one has to remember to pay future premiums, and no one can skip out on the premium payments. If the debt is repaid early, there will usually be a refund of some or all of the "unearned" premium. Either way, the debt gets paid.

Hope this helps to clear the confusion.

Posted: 05 Dec 2009 02:32 Post Subject: insurance

OK.....alot of your explaination DOES make sense. I guess that's looking toward your future...taking care of it, I mean. With all of that money, your debts WOULD be paid!!LOL

Posted: 05 Dec 2009 11:14 Post Subject:

Actually, $500,000 is about triple the average amount of lindividual ife insurance in force in America. It's a bit higher for term policies at about $240,000.

Here in California, $500,000 is not going to pay off most mortgages + consumer debt + fund children's education + leave anything for the surviving spouse.

And after 2010, when the old estate tax rules reappear, many middle income households are going to be exposed to estate taxes simply due to the value of their home, cars, retirement plan assets, business assets, and life insurance benefits.

The Democrats plan for Obamacare (if it passes) will be financed in part by the reaping of the 55% estate tax on the largest estates that are not properly protected. When they talk about the "wealthy paying their fair share" most people think they're only talking about income tax. The estate tax is the Democrats' secret weapon.

If it drops back to just $1,000,000, a $500,000 home and a $500,000 life insurance policy is all it will take to expose every additional penny of estate value to taxation following death (yes, I know, it all passes to the spouse at "step up value" first, but not everyone is married, and there are plenty of widows and widowers waiting at death's doorstep -- with plenty more on the way as we Baby Boomers are now hitting our 60s).

Posted: 06 Dec 2009 12:01 Post Subject:

Max, there is a 0% chance of it going back to $1,000,000.

Posted: 06 Dec 2009 12:04 Post Subject:

--------------------------------------------------------------------------------

I guess I'm putting in my '2 cents' in here: why would you WANT to pay on an Life Insurance policy on your ex? I'm not saying it's a 'wrong' thing to do, but,..I guess I never understood why people do this. Can you give me some more 'insight' please? I'm very curious. :wink: :oops:



Let's keep this super simple. You don't want to pay for an insurance policy on your ex. You want to collect on an insurance policy on your ex. The best way to make this happen is to be the owner and beneficiary and payer of the policy.

Sometimes this is becuase you simply want to benefit. Other times, it is because the death of your ex can cause a financial hardship.

Posted: 06 Dec 2009 08:38 Post Subject: insurance

Let's keep this super simple. You don't want to pay for an insurance policy on your ex. You want to collect on an insurance policy on your ex.

Ok..I get it. It's almost looking at it like 'is the glass half full or half empty'. Can 'you' actually get a Life Insurance policy, on someone, without them actually knowing? I've never known a circumstance like this, but, I'm just wondering.

Posted: 06 Dec 2009 09:09 Post Subject:

It's possible, but certain criteria must be met.

However, I'm talking more about keeping a policy in force on an ex or buying a policy, with their knowledge.

Posted: 06 Dec 2009 06:04 Post Subject:

Two things. In a "best case scenario", estate tax exemption might make it to $2,000,000. But we'll all have to watch Congress in the next 12 months -- because if they don't act, it WILL roll back to $1,000,000 -- the amount it was scheduled to increase to when EGTRRA was enacted in 2001.

Second, It is NOT normally possible to obtain life insurance on an adult oerson without their knowledge or cooperation!

Why not? Because all life insurance applicants age 18 or older MUST sign the application to acknowledge that the information provided in the application BY THEM is correct. An owner who is not also the insured must also sign the application, acknowledging the presence of insurable interest.

If any person other than the insured signs the application "as" or "in place of" the insured, it is not a valid application and can be voided by the insurer even beyond the normal 2-year contestability period (the point in time where the policy usually becomes incontestable).

Even STOLI transactions usually wait until the policy becomes incontestable before ownership is assigned to the originator who has no insurable interest when the application is made.

Posted: 06 Dec 2009 06:05 Post Subject:

Two things. In a "best case scenario", estate tax exemption might make it to $2,000,000. But we'll all have to watch Congress in the next 12 months -- because if they don't act at all (which they don't have to due to the EGTRRA sunset clause), it WILL roll back to $1,000,000 -- the amount it was scheduled to increase to when EGTRRA was enacted in 2001.

Second, It is NOT normally possible to obtain life insurance on an adult person without their knowledge or cooperation! (Parents commonly obtain life insurance on their children without their knowledge or consent, and this is acceptable because they are minors who are not capable of contrracting.

Why not? Because all life insurance applicants age 18 or older MUST sign the application to acknowledge that the information provided in the application BY THEM is correct. An owner who is not also the insured must also sign the application, acknowledging the presence of insurable interest.

If any person other than the insured signs the application "as" or "in place of" the insured, it is not a valid application and can be voided by the insurer even beyond the normal 2-year contestability period (the point in time where the policy usually becomes incontestable).

Even STOLI transactions usually wait until the policy becomes incontestable before ownership is assigned to the originator who has no insurable interest when the application is made.

Posted: 06 Dec 2009 07:44 Post Subject:

Max, it's VERY dangerous to know things that aren't true. You really need to ask more questions and do less pontificating.

1)You are wrong that it $2,000,000 is the best case scenario. I'm not saying that it won't be $2,000,000, but there is no reason to make an assumption that they will lower from where it is now.

2)Yes, a life insurance applicant must sign an application. Yes, nobody can sign in place of the insured. However, it is NOT a legal requirement that an insured who isn't the owner sign a life insurance application.

Ex. Max is my employee. He is my best employee. I want to buy a $1,000,000 policy on him without his knowledge. It is absolutely possible to do this!

Posted: 07 Dec 2009 06:55 Post Subject:

Max, it's VERY dangerous to know things that aren't true. . . . However, it is NOT a legal requirement that an insured who isn't the owner sign a life insurance application.



You are so wrong, Fakadur. First, as to your subpoint (2).

How does anyone other than the insured provide the federally-required HIPAA consent to release medical records? How does anyone other than the insured give consent to HIV/AIDS testing (required in California and most other states -- unless the insurer does not test anyone for the diseases)?

Life insurance contracts are two-party contracts between the insurer and the insured When an owner/applicant other than the insured is also involved, the contract is known as a "third-party contract". The insured CANNOT lwafully be left out of the process.

As you will see in the actual life insurance application examples provided in the attachment, the insured is required by the insurer (AKA: meeting the legal requirement of contract law to form a contract between insurer and insured) to provide their signature attesting to the correctness of answers provided in the application and, since the passage of HIPAA in the 1990s, the required consent to obtain/release "protected medical information."

So, to what country were you referring? No US-issued life insurance application for an adult will be received by an insurer without the insured's signature. Even Prudential requires insureds as young as age 8 to sign their application (when otherwise being submitted by their adult parent/guardian who has legal capacity to contract on the child's behalf).

And here are some sections from the California Insurance Code that bear relevance to the general discussion of applying for insurance. In this regard, California law is not unlike insurance law in most other states.

CIC 286. An interest in property insured must exist when the insurance takes effect, and when the loss occurs, but need not exist in the meantime; and interest in the life or health of a person insured must exist when the insurance takes effect, but need not exist thereafter or when the loss occurs.

CIC 10110.1 (d) An insurable interest shall be required to exist at the time the contract of life or disability insurance becomes effective, but need not exist at the time the loss occurs.

CIC 10110.1 (e) Any contract of life or disability insurance procured or caused to be procured upon another individual is void unless the person applying for the insurance has an insurable interest in the individual insured at the time of the application.

CIC 10110.2. An insurer shall be entitled to rely upon all statements, declarations, and representations made by an applicant for insurance relative to the insurable interest that the applicant has in the insured, and no insurer shall incur any legal liability except as set
forth in the policy, by virtue of any untrue statements,
declarations, or representations so relied upon in good faith by the insurer. [NOTE: answers to medical history questions in individual life applications is not "relative to the insurable interest". Only in the case of minor applicants will an insurer rely on the health statements made by an adult about the minor child. All others must be made by, and signed for by, the insured.]

CIC 10110.3. (a) An insurer may not issue an individual life insurance policy to an applicant that insures the life of the applicant's spouse unless the applicant's spouse has signed the policy application or has otherwise been notified in advance of the issuance of the policy.

CIC 10113. Every policy of life, disability, or life and disability insurance issued or delivered within this State on or after the first day of January, 1936, by any insurer doing such business within this State shall contain and be deemed to constitute the entire contract between the parties and nothing shall be incorporated therein by
reference to any constitution, by-laws, rules, application or other writings, of either of the parties thereto or of any other person, unless the same are indorsed upon or attached to the policy; and all statements purporting to be made by the insured shall, in the absence of fraud, be representations and not warranties. Any waiver of the provisions of this section shall be void.

Your "example" sucks! "Best employee" or otherwise, you are not going to be able to apply for insurance on his life, regardless of who or what the beneficiary is, without his knowledge and written consent/signature on the application. California law (several states have followed this lead) in the aftermath of the "Wal*Mart" incident in 2002 or 2003 specifically prohibits an employer from obtaining "corporate-owned life insurance" (and, no, you don't have to be incorporated to obtain COLI) in which it is the beneficiary if the employee is not an "exempt" employee (defined in both state and federal labor law). The whole CIC section is far too long to print here, but you can look it up: CIC 10110.4 Insurance obtained without the employee's consent is fraudulently obtained and the policy would be void upon the insurer learning the truth.

Now, as to estate taxes, your subpoint (1), YOU need to do a little more study on the issue. Because it is not necessary for Congress to do ANYTHING in the coming 12 months for the following to occur. If they do something, it will likely be to set the exemption limit somewhere in the vicinity of $2,000,000. They are HIGHLY UNLIKELY to continue the 2009 exemption of $3.500,000 after 12-31-2010, because they need the revenue to balance the Obamacare cost equation.

Anyway, here's the reality that Congress established in 2001 when it voted to enact EGTRRA. You can find this information anywhere on the Internet. The following excerpt is taken from Wikipedia in it's entirely:

Future of the Estate Tax and Capital Gains Taxes on Inherited Property

Congress has passed tax laws that have made numerous, temporary changes to both the estate tax rate and the exemption amount. Since 2002, the top rate has decreased incrementally from 50%, and the exemption amount has increased incrementally from $1 million. In 2009 the rate is 45% and the exemption amount is $3.5 million. On January 1, 2010 a "one year repeal" of the tax is scheduled to be effectuated by a temporary, one-year-only rate of 0%, but on January 1, 2011 the estate tax is scheduled to return at a top rate of 55% and the exemption amount is scheduled to drop back down to $1.0 million.[citation needed] Many legislative tax analysts suspect that Congress and President Obama will not permit this legislatively scheduled repeal-and-increase scheme to actually go into effect between January 1, 2010 and January 1, 2011. To avoid the temporary repeal and subsequent reinstatement of the tax at the higher rate, the 2009 rate of 45% and exemption amount of 3.5 million could be extended beyond December 31, 2009, or the rate and exemption amount could be permanently fixed at some amount greater than zero before that date.

If the law does not change, for 2010 property transferred from decedents will be treated as if it is transferred by gift. This means the basis of the property for calculating capital gains when the recipient eventually sells the property will be the same basis as in the hands of the decedent. This is generally called carryover basis. However most recipients will effectively get the same result they would receive under present law, because section 1022 allows the executor of an estate to allocate up to 1.3 million in basis for singles and 3 million for surviving spouses to the property of the estate. This will effectively give most recipients a tax basis in the property equal to the full market value ie. "step up basis". See 26 U.S.C. § 1022.


Given the state of affairs in Washington, DC, where the major distraction is finding 60 votes in the Senate to bring Obamacare to a vote is becoming increasingly unlikely, there has not been, and will not be, any congressional action to extend the 2009 $3,500,000 exemption and tax rate into 2010 as speculated above.

So 2010 will be the perfect year in which to die. 2011 and beyond are not such good prospects. The estate tax could be, as I stated, as bad as a $1,000,000 exemption or, my best guess at a "best-case" scenario, $2,000,000. Anything higher is a "gift" from Congress. But if a "public option" makes its way into Obamacare, there is no way to finance it without the expected revenue from estate taxes at a taxable level significantly lower than $3,500,000 and a statutory 55% rate.

So go do your homework and report back.

Posted: 07 Dec 2009 06:57 Post Subject:

Max, it's VERY dangerous to know things that aren't true. . . . However, it is NOT a legal requirement that an insured who isn't the owner sign a life insurance application.



You are so wrong, Fakadur. First, as to your subpoint (2).

How does anyone other than the insured provide the federally-required HIPAA consent to release medical records? How does anyone other than the insured give consent to HIV/AIDS testing (required in California and most other states -- unless the insurer does not test anyone for the diseases)?

Life insurance contracts are two-party contracts between the insurer and the insured When an owner/applicant other than the insured is also involved, the contract is known as a "third-party contract". The insured CANNOT lawfully be left out of the process.

As you will see in the actual life insurance application examples provided in the attachment, the insured is required by the insurer (AKA: meeting the legal requirement of contract law to form a contract between insurer and insured) to provide their signature attesting to the correctness of answers provided in the application and, since the passage of HIPAA in the 1990s, the required consent to obtain/release "protected medical information."

So, to what country were you referring? No US-issued life insurance application for an adult will be received by an insurer without the insured's signature. Even Prudential requires insureds as young as age 8 to sign their application (when otherwise being submitted by their adult parent/guardian who has legal capacity to contract on the child's behalf).

And here are some sections from the California Insurance Code that bear relevance to the general discussion of applying for insurance. In this regard, California law is not unlike insurance law in most other states.

CIC 286. An interest in property insured must exist when the insurance takes effect, and when the loss occurs, but need not exist in the meantime; and interest in the life or health of a person insured must exist when the insurance takes effect, but need not exist thereafter or when the loss occurs.

CIC 10110.1 (d) An insurable interest shall be required to exist at the time the contract of life or disability insurance becomes effective, but need not exist at the time the loss occurs.

CIC 10110.1 (e) Any contract of life or disability insurance procured or caused to be procured upon another individual is void unless the person applying for the insurance has an insurable interest in the individual insured at the time of the application.

CIC 10110.2. An insurer shall be entitled to rely upon all statements, declarations, and representations made by an applicant for insurance relative to the insurable interest that the applicant has in the insured, and no insurer shall incur any legal liability except as set
forth in the policy, by virtue of any untrue statements,
declarations, or representations so relied upon in good faith by the insurer. [NOTE: answers to medical history questions in individual life applications is not "relative to the insurable interest". Only in the case of minor applicants will an insurer rely on the health statements made by an adult about the minor child. All others must be made by, and signed for by, the insured.]

CIC 10110.3. (a) An insurer may not issue an individual life insurance policy to an applicant that insures the life of the applicant's spouse unless the applicant's spouse has signed the policy application or has otherwise been notified in advance of the issuance of the policy.

CIC 10113. Every policy of life, disability, or life and disability insurance issued or delivered within this State on or after the first day of January, 1936, by any insurer doing such business within this State shall contain and be deemed to constitute the entire contract between the parties and nothing shall be incorporated therein by
reference to any constitution, by-laws, rules, application or other writings, of either of the parties thereto or of any other person, unless the same are indorsed upon or attached to the policy; and all statements purporting to be made by the insured shall, in the absence of fraud, be representations and not warranties. Any waiver of the provisions of this section shall be void.

Your "example" sucks! "Best employee" or otherwise, you are not going to be able to apply for insurance on his life, regardless of who or what the beneficiary is, without his knowledge and written consent/signature on the application. California law (several states have followed this lead) in the aftermath of the "Wal*Mart" incident in 2002 or 2003 specifically prohibits an employer from obtaining "corporate-owned life insurance" (and, no, you don't have to be incorporated to obtain COLI) in which it is the beneficiary if the employee is not an "exempt" employee (defined in both state and federal labor law). The whole CIC section is far too long to print here, but you can look it up: CIC 10110.4 Insurance obtained without the employee's consent is fraudulently obtained and the policy would be void upon the insurer learning the truth.

Now, as to estate taxes, your subpoint (1), YOU need to do a little more study on the issue. Because it is not necessary for Congress to do ANYTHING in the coming 12 months for the following to occur. If they do something, it will likely be to set the exemption limit somewhere in the vicinity of $2,000,000. They are HIGHLY UNLIKELY to continue the 2009 exemption of $3.500,000 after 12-31-2010, because they need the revenue to balance the Obamacare cost equation.

Anyway, here's the reality that Congress established in 2001 when it voted to enact EGTRRA. You can find this information anywhere on the Internet. The following excerpt is taken from Wikipedia in it's entirely:

Future of the Estate Tax and Capital Gains Taxes on Inherited Property

Congress has passed tax laws that have made numerous, temporary changes to both the estate tax rate and the exemption amount. Since 2002, the top rate has decreased incrementally from 50%, and the exemption amount has increased incrementally from $1 million. In 2009 the rate is 45% and the exemption amount is $3.5 million. On January 1, 2010 a "one year repeal" of the tax is scheduled to be effectuated by a temporary, one-year-only rate of 0%, but on January 1, 2011 the estate tax is scheduled to return at a top rate of 55% and the exemption amount is scheduled to drop back down to $1.0 million.[citation needed] Many legislative tax analysts suspect that Congress and President Obama will not permit this legislatively scheduled repeal-and-increase scheme to actually go into effect between January 1, 2010 and January 1, 2011. To avoid the temporary repeal and subsequent reinstatement of the tax at the higher rate, the 2009 rate of 45% and exemption amount of 3.5 million could be extended beyond December 31, 2009, or the rate and exemption amount could be permanently fixed at some amount greater than zero before that date.

If the law does not change, for 2010 property transferred from decedents will be treated as if it is transferred by gift. This means the basis of the property for calculating capital gains when the recipient eventually sells the property will be the same basis as in the hands of the decedent. This is generally called carryover basis. However most recipients will effectively get the same result they would receive under present law, because section 1022 allows the executor of an estate to allocate up to 1.3 million in basis for singles and 3 million for surviving spouses to the property of the estate. This will effectively give most recipients a tax basis in the property equal to the full market value ie. "step up basis". See 26 U.S.C. § 1022.


Given the state of affairs in Washington, DC, where the major distraction is finding 60 votes in the Senate to bring Obamacare to a vote is becoming increasingly unlikely, there has not been, and will not be, any congressional action to extend the 2009 $3,500,000 exemption and tax rate into 2010 as speculated above.

So 2010 will be the perfect year in which to die. 2011 and beyond are not such good prospects. The estate tax could be, as I stated, as bad as a $1,000,000 exemption or, my best guess at a "best-case" scenario, $2,000,000. Anything higher is a "gift" from Congress. But if a "public option" makes its way into Obamacare, there is no way to finance it without the expected revenue from estate taxes at a taxable level significantly lower than $3,500,000 and a statutory 55% rate.

So go do your homework and report back.

Posted: 08 Dec 2009 01:12 Post Subject:

Max, that was some long post!

Let's make the following assumptions.
1) I have an insurable interest in your life.
2) You are not my hourly employee.
3) You are not my wife.
4) An insurance company is willing to issue a policy without medical information from you.

Now, please show us anything in the California insurance code that makes this illegal.

Here's a clue for you. It's legal!

This is strike three for you, Max. You were wrong about default beneficiaries. You were wrong in your understanding of how secondary guarantees in UL policies work and now you are wrong about this.

I would take no joy in pointing out your mistakes if you didn't act like such a know it all.

Posted: 08 Dec 2009 01:15 Post Subject:

Thanks for the Wikipedia plagiarism in regards to estate taxes. My guess is $3.5 million. Your guess is $2.0 million. Who confuses a guess with a best case scenario...other than you?

Posted: 08 Dec 2009 01:47 Post Subject:

Farla

It's only plagiarism if you use the material without attributing its source, which I plainly did, as you acknowledged. Read other sources in the financial planning community to get a sense of what Congress is thinking. It's not $3.5 million.

Sdlkfjas . . . your post said you wanted a $1,000,000 policy on your employee. No insurer underwrites that much without a medical app. Try again.

The specifics of who signs a contract, if you don't also see it delineated in the insurance code, is covered under contract law (Civil Code, etc. -- depends on the state). For a contract to have legal force, it must be voluntarily entered into by the parties to the contract. The insured is ALWAYS a party to an insurance contract -- language internal to the policy acknowledges that, and states that the insured will become the new owner if the existing owner dies prior to the insured and has not assigned the policy to another party. If not also the owner, the insured simply has no power to exercise the rights of ownership. But the owner doesn't get a contract of life insurance on a person without their knowledge and consent. Sorry.

Companies such as TransAmerica (and others) that market "jet issue" non-underwritten policies for amounts up to $50,000 still require the signature of the insured on their applications, because they know it's not going to be a legal contract without the signature. Obviously, as I've already alluded to, anyone could submit a fraudulent app for insurance -- it wouldn't be a first -- with a forged signature. But your scenario doesn't wash.

So, I ask you to show us an insurance company that writes $1,0000,000 policies on adult persons with capacity to contract who do not sign the application. There are none.

Posted: 08 Dec 2009 02:05 Post Subject:

I can very easily prove that you are wrong on this one. I'll make a deal with you. I'll prove you wrong. In exchange for giving you this learning experience, I would like you to start a thread that says, "My name is Max Herr and I don't know what I don't know."

If I'm wrong, I'll agree to stop posting here.

We'll let someone impartial like Insurance Teacher or Insurance Investigator be the judge of who is correct.

Do we have a deal?

Posted: 08 Dec 2009 02:26 Post Subject:

I'll start a thread on the topic of required signatures on a life insurance application.

Agreed?

Posted: 08 Dec 2009 12:42 Post Subject:

Am I agreeing that you are starting a new thread or are we agreeing that you will start a thread that says, "My name is Max Herr and I don't know what I don't know"?

I'll gladly supply the proof once you agree that you'll do this.

Posted: 11 Dec 2009 02:47 Post Subject: insurance

(Hopefully no one will 'bite my head off' over this...) I was looking on the website that I have Life Insurance for my son. I was scanning different 'options', etc. I DID come across a section that talks about insuring someone who is "18 years of age and older." According to what I read, the Insured (if 18 years or older) DOES have to sign a Life Insurance policy. So....if my son was 18 years old now, he would have to sign the Life Insurance policy that I started on him.

Posted: 11 Dec 2009 05:21 Post Subject:

If you folks don't stop sniping at eachother and acting like a bunch of 7-year olds, I'm going to lock this thread. Several things should be fairly obvious to everyone participating in this wonderful grenade-chuckin' contest:

1. There ARE definitely instances whereby you can purchase life insurance on the life of another without the others' signature. So, those of you who are still whining about this- STOP WHINING ABOUT THIS.

2. It's pretty apparent that different states have different laws. For instance, Max quoted California law (which, by the way, is another country because of your truly weird community property laws) and I cited Oregon law. I could cite law from every other stinkin' state and you would see minor differences. So, those of you who are still whining about this- STOP WHINING ABOUT THIS.

3. About the absurd notion of a carrier issuing a $1,000,000 policy without a medical. GET OVER IT- it AIN'T GONNA HAPPEN.

4. Can a parent effect coverage on a child? Should an agent physically view the child prior to application completion? Are there instances in which a child has to sign the app? Do situations exist whereby an employer can purchase coverage on the life of an employee? Are insurable interest requirements important? Are estate consequences something that should be considered when looking at amounts of life insurance? Will the Chicago Cubs ever win a World Series in my lifetime? YES, YES, YES, YES, YES, YES...No :(

So, I have a request. While I absolutely appreciate the veritable fountain of knowledge being vomited forth here, I would ask that you maintain some modicum of decorum while venturing out with your comments. If I were a guest visiting the site, I would be (1) highly amused, (2) pretty confused, and as a poster, feel (3) kind of abused.

Get my drift? :wink:

InsTeacher 8)

Posted: 11 Dec 2009 01:43 Post Subject:

Points well taken. Enough said.

Posted: 12 Dec 2009 03:37 Post Subject:

3. About the absurd notion of a carrier issuing a $1,000,000 policy without a medical. GET OVER IT- it AIN'T GONNA HAPPEN.



Please let's stop posting incorrect information. Contact Petersens if you doubt me. These are not typical cases. These policies are almost always multi-million dollar policies. In fact, I don't know if they'll write one that isn't. No medical is needed.

This isn't like buying a whole life policy. It's not even like buying a 20 year level term policy. It's a one year policy and it will end earlier if the insurable interest no longer exists.

FACT: One can legally buy a multi-million dollar insurance policy in the U.S. without the insured knowing and without the insured signing the application and without any medical exams or medical records. There must be an insurable interest.

Posted: 12 Dec 2009 06:27 Post Subject:

Yes, and it's a policy issued through Lloyd's of London and so has no responsibility to adhere to domestic insurance regulations. Not that it's a bad thing. But it's not the kind of policy that the average person visiting this site is interested in.

The persons asking for insight here are going to submit an application with a company subject to domestic laws, and has been pointed out, the scenarios you have posted just won't wash in the regulated, domestic market.

It's like saying, "But of course my Lamborghini does 180 mph, and I can show you." Not on any freeway in Southern California during rush hour, and not lawfully on any public road or highway anywhere else in the US. But transport the vehicle to the Autobahn in Germany, and your claim is valid.

So let's just shake hands and agree that we're both right and both wrong -- based on one very narrow example.

Posted: 12 Dec 2009 10:53 Post Subject: Correct Information

Wrong information should immediately be corrected. However, you aren't doing that and refuse to change your stance until you are backed into a corner. You are now making up stuff because you don't know better.

There is nothing worse than guessing at answers. You don't have to know everything. It is ok to say, "I don't know."

Yes, and it's a policy issued through Lloyd's of London and so has no responsibility to adhere to domestic insurance regulations.



Please just admit that you have never dealt with this kind of stuff and this is completely out of your realm of expertise. This is directly from the Lloyd's website:

"US business underwritten at Lloyd's must be placed in accordance with US regulatory requirements and coverage must comply with local law. New insurance enquiries from US residents should be directed to an insurance agent or broker who is licensed to conduct business in the relevant state. "

If you had ever done business with them, you would know how wrong you are.

Posted: 13 Dec 2009 03:26 Post Subject: insurance

The Insurance Experts, on this Forum, have their 'specific area' that they are experts in. It's nice that I can read through the Thread and 'compare notes' on given opionions. However......it's NOT professional to 'bash' each other (those that ARE doing the 'bashing'..).

Posted: 11 Mar 2010 07:52 Post Subject: military beneficiary

My husband and I got divorced last year (in Fl). He is retired military and has a life insurance with them. Who do I call to find out, if he as changed the beneficiary or not. I can not talk to him, as he had a bad accident and hs in a coma right now!

Posted: 12 Mar 2010 02:21 Post Subject:

Unfortunately, unless you are the owner of the policy, it's not likely that VGLI will provide you with any information. But you can contact the VGLI office at the Department of Veteran Affairs at 1-800-827-1000, and at least give it a try.

For additional information about VGLI, visit their website at

http://www.insurance.va.gov/sgliSite/vgli/vgli.htm

Posted: 12 Mar 2010 08:40 Post Subject: call

Call the VA and ask. If they wont tell ,you call back. I found out. It was easy. I called back got a different person, and found out. Heck the Va doesnt care about anything. I had a fellow writing his wife in ,on my fathers form. Nothing really matters with them. The VA is a messed up place. Believe me i know, i have been talking with them for a long time. Good luck

Posted: 14 Mar 2010 05:51 Post Subject: Siblings Share of Beneficary Proceeds

My father's life insurance policy application only allowed him to list two beneficiaries. He listed my mother and my oldest sister. My mother passed away first and then my dad. My sister, who was listed as the beneficiary used the insurance proceeds to bury him. There are three other siblings. My father died intestate in August 2008. We established his estate (currently in probate) approximently in April 2009. My oldest sister wants to be reimbursed for the money she used to pay for his funeral expenses from the estate's proceed. Since there were only a limited amount of space allowed to list the remaining children as beneficiaries, does this mean we are not intitled to the money?

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