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 Posted: Sun Aug 07, 2011 12:55 am Post subject: LIFE INSURANCE |
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My significant other and I have been together over 24 years. We are not married and do not live together and don't know if we will. I would like to have an insurance policy on him. I do not know the legality of this since we do not cohabitate. Guidance, please...
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RAIMMEE04
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| Posted: Sun Aug 07, 2011 7:58 am Post subject: |
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You do not have any obvious INSURABLE INTEREST, even though you've been dating for 24 years. The best way to accomplish this is for your "significant other" to obtain the life insurance on his own and either (1) make you an irrevocable beneficiary, or (2) wait for more than two years after the policy is issued to have him assign the policy ownership to you.
Because you have no insurable interest, it might appear to the insurance company and/or state insurance regulators to be a "stranger-originated life insurance" (STOLI) transaction, which is now prohibited in most states, if you are assigned ownership shortly after the policy passes its second anniversary. Most companies are asking a question in the application (or a supplemental document) if the owner intends to transfer ownership to a third party within two years of the policy effective date.
Obviously, the long-standing relationship argues against that premise, but it also hinges on whose idea it is to obtain the insurance in the first place. The transfer of ownership of a STOLI policy also requires specific "consideration" to be exchanged for the right to own the contract, and it generally has income tax implications for both parties.
The irrevocable beneficiary path is probably the best one to take.
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MaxHerr
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| Posted: Thu Oct 06, 2011 10:14 pm Post subject: |
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thanks so much for asking this question. im kinda in same boat but we have been together for 7 years. i am an ex truck driver and have no idea what i would do if something happen to him. im 51 and use to flatbed..it took a tole on me so i really depend on him. he knows this too so im not doing anything behind his back..lol. thanks for the answers
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| Posted: Fri Oct 14, 2011 5:44 am Post subject: life insurance |
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life insurance is very important to save our life and also our special friend(life partner). you can save the life of your boy friend, but it might not be possible that he is trustworthy for you. he can change his decision.
so think about it and insurance companies can also arise these type of questions.
thankyou,
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oliviaskye
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| Posted: Sun Nov 27, 2011 6:33 am Post subject: |
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You can not be the beneficiary at the time of application, but after the policy is issued, you can change the beneficiary to you and so the answer initially is no but then the answer becomes yes.
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TaxFreeIncome
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| Posted: Thu Dec 01, 2011 4:49 am Post subject: |
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| Quote: | | You can not be the beneficiary at the time of application, but after the policy is issued, you can change the beneficiary to you and so the answer initially is no but then the answer becomes yes. |
How about more of an explanation?
How will the beneficiary be changed to her if she isn't the owner? If she is the owner, there won't be an issue with her being the beneficiary.
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fmvs
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| Posted: Thu Dec 01, 2011 8:29 pm Post subject: |
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I don't think the issue here is that her boyfriend doesn't know that she is buying life insurance on him, she is concerned about it being legal for her to be the beneficiary. It is true that the owner of the contract would have to make the change. My statement was that for her to be the beneficiary legally, they would have to change the beneficiary to her after the policy is issued and inforce.
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TaxFreeIncome
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| Posted: Thu Dec 01, 2011 10:11 pm Post subject: |
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TaxFreeIncome, what makes you think that he can't be the policyowner with his girlfriend as the beneficiary from time of application?
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fjvmai
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| Posted: Fri Dec 02, 2011 7:41 am Post subject: |
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I didn't say he couldn't. I was simply stating that a person could change the beneficiary after the policy is inforce to anyone they want without having to go through proving to the insurance company insurable interest. In this situation their is definitely insurable interest and their wouldn't be a problem but If one didn't want to go through the hassle of coming up with documents to prove the insurable interest, they could simply just change the beneficiary after the policy was inforce.
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TaxFreeIncome
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| Posted: Fri Dec 02, 2011 11:44 am Post subject: |
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There does not need to be an insurable interest on the part of the beneficiary. The necessary insurable interest is between the owner and the insured.
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dfggsdhj
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| Posted: Fri Dec 02, 2011 6:40 pm Post subject: |
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| Quote: | | You can not be the beneficiary at the time of application |
Anyone or anything may be the beneficiary at any time in the life of an insurance contract -- there is NEVER any requirement for insurable interest between the insured and the beneficiary.
As dfggsdhj has stated, the only concern is that AT THE TIME OF APPLICATION / POLICY ISSUE there must be insurable interest between the owner and the insured. If there is no insurable interest, there can be no contract of insurance -- this is a requirement of the Insurance Code in every state.
When the owner/applicant is someone other than the insured at the time of application, the insured must consent to be insured, and voluntarily participate in the application process. After the policy is issued, the owner may be changed, and the new owner is never required to have insurable interest in the insured.
TaxFreeIncome has it backwards. Just like his idea that life insurance is designed to provide tax-free income for the owner.
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MaxHerr
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| Posted: Fri Dec 02, 2011 6:46 pm Post subject: |
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| Quote: | | In this situation their is definitely insurable interest |
In this situation, there MAY BE insurable interest, but it is certainly NOT definite. The law does not recognize, on its face, insurable interest between boyfriends and girlfriends. There must be a "reasonable expectation of pecuniary interest" between the owner and the insured.
Insurable interest probably does exist in this situation, but it would absolutely exist with the benefit of a valid marriage license. It is up to the insurance company to determine insurable interest within the confines of the Insurance Code of the state in which the policy is issued.
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MaxHerr
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| Posted: Fri Dec 02, 2011 7:44 pm Post subject: |
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Max,
You are putting words in my mouth, I NEVER SAID OR SUGGESTED THAT LIFE INSURANCE IS DESIGNED TO PROVIDE A TAX FREE INCOME. I said that a benefit SOME life insurance policies is that fact that it can provide a tax free income. NOW YOU CHIMED IN WITH OUR ANAL ANALYSIS and declared that it is not an income and that it is a loan. WHO GIVES A ****! All that matters is that the client understands the situation. It is income replacement for them. As long as the product is sold correctly and as long as the client understands and funds the policy properly WHO CARES! ANAL people like you! You know, you are what is wrong with this world. You have to be a LIBERAL! When you were a kid, I bet you were the one who ran to the teacher saying "Freddy pinched me!"
When I sell life insurance to provide a TAX FREE BENEFIT (INCOME), my clients understand that the money they are receiving is in the form of a loan that deducts against the death benefit at the time of death! They understand this! When I sell this type of policy, it is NEVER designed to ever cover any legacy needs! I sell other policies to cover those needs. Maybe you have forgotten that life insurance to cover a need? Let me guess, you never sell life insurance to provide an income at retirement. You sell mutual funds and variable annuities so that the people can lose their money and not have a retirement. Stop putting words in my mouth Max and will you once just once admit you are wrong! I know it isn't in your make up to admit that, you are a Liberal.
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TaxFreeIncome
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| Posted: Fri Dec 02, 2011 7:44 pm Post subject: |
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Max,
You are putting words in my mouth, I NEVER SAID OR SUGGESTED THAT LIFE INSURANCE IS DESIGNED TO PROVIDE A TAX FREE INCOME. I said that a benefit SOME life insurance policies is that fact that it can provide a tax free income. NOW YOU CHIMED IN WITH OUR ANAL ANALYSIS and declared that it is not an income and that it is a loan. WHO GIVES A ****! All that matters is that the client understands the situation. It is income replacement for them. As long as the product is sold correctly and as long as the client understands and funds the policy properly WHO CARES! ANAL people like you! You know, you are what is wrong with this world. You have to be a LIBERAL! When you were a kid, I bet you were the one who ran to the teacher saying "Freddy pinched me!"
When I sell life insurance to provide a TAX FREE BENEFIT (INCOME), my clients understand that the money they are receiving is in the form of a loan that deducts against the death benefit at the time of death! They understand this! When I sell this type of policy, it is NEVER designed to ever cover any legacy needs! I sell other policies to cover those needs. Maybe you have forgotten that life insurance to cover a need? Let me guess, you never sell life insurance to provide an income at retirement. You sell mutual funds and variable annuities so that the people can lose their money and not have a retirement. Stop putting words in my mouth Max and will you once just once admit you are wrong! I know it isn't in your make up to admit that, you are a Liberal.
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TaxFreeIncome
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| Posted: Sat Dec 10, 2011 9:22 pm Post subject: |
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| Quote: | | All that matters is that the client understands the situation. It is income replacement for them. |
Sorry I missed this.
WRONG. Life insurance is not income replacement for the client, it is income protection for those left behind.
You want income? Buy an annuity. That will provide you with income.
Buy life insurance and borrow all the money out of the policy? No one gets a dime when you die. That's not income, that's robbery.
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MaxHerr
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