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Started By
Message
Term Life at age 64
Posted on 3/16/10 at 10:12 am
Posted on 3/16/10 at 10:12 am
I am trying to help my Mother In Law get her finances in order. One of her monthly bills is $40 for Term Life Insurance ($25,000). I believe the term is for age 80.
She owns her home, has no dependants, fixed income, and plenty of debt. Age 64.
She insists on keeping it to pay for burial exspenses and "To leave the girls something" I want her to cancel the policy. I dont see any benefit of keeping it.
She has another life insurance policy that has a payout of $1100, that she does not have to pay premiums for. I say designate this as funds for final exspenses.
So, I need confirmation, would there be any benefit of keeping the other policy? Any other thoughts?
She owns her home, has no dependants, fixed income, and plenty of debt. Age 64.
She insists on keeping it to pay for burial exspenses and "To leave the girls something" I want her to cancel the policy. I dont see any benefit of keeping it.
She has another life insurance policy that has a payout of $1100, that she does not have to pay premiums for. I say designate this as funds for final exspenses.
So, I need confirmation, would there be any benefit of keeping the other policy? Any other thoughts?
2
Posted on 3/16/10 at 10:15 am to Chris4x4gill2
quote:
and plenty of debt.
Even more need for a $40 per month policy.
quote:
She has another life insurance policy that has a payout of $1100, that she does not have to pay premiums for. I say designate this as funds for final exspenses.
Expect final expenses to be around $5,000. So that $1100 isn't going to come close.
Posted on 3/16/10 at 10:15 am to Chris4x4gill2
I will pay the premiums for her if she will name me as the beneficiary. Don't cancel it.
$40 a month for is $480 annually X 16 years is $7,680 in premiums. How is her health?
$40 a month for is $480 annually X 16 years is $7,680 in premiums. How is her health?
Posted on 3/16/10 at 10:23 am to John Merlyn
Health is not good. I doubt she will make it to the end of the term.
If she keeps the insurance plan, how would it be treated at her death? Would it all go to paying creditors? Or is it the sole property of the beneficiaries?
If she keeps the insurance plan, how would it be treated at her death? Would it all go to paying creditors? Or is it the sole property of the beneficiaries?
Posted on 3/16/10 at 10:24 am to Chris4x4gill2
And she has requested cremation, so I think that the smaller plan will cover that or at least most of it.
Posted on 3/16/10 at 10:25 am to Chris4x4gill2
quote:
Or is it the sole property of the beneficiaries?
Does her debt exceed her net worth? Weird wording I know but you get the drift. Negative net worth?
This post was edited on 3/16/10 at 10:26 am
Posted on 3/16/10 at 10:27 am to Broke
Her assets would not cover her debt.
Posted on 3/16/10 at 10:28 am to Chris4x4gill2
quote:
Her assets would not cover her debt.
Disinherit. Let the creditors eat that debt. Distance yourselves financially.
Posted on 3/16/10 at 10:31 am to Broke
That is the goal. All I am trying to do is get her monthly necessities within her income. Thats the reason for wanting to drop the $40/month payment.
Any idea on finacial ramifications to her daughters at the time of her death if they are listed as beneficiaries of the life insurance?
Any idea on finacial ramifications to her daughters at the time of her death if they are listed as beneficiaries of the life insurance?
Posted on 3/16/10 at 10:35 am to Chris4x4gill2
quote:You must be planning a do-it-yourself cremation. You know, throw ma-in-law on the bonfire type of thing. Cremations are about half the cost of traditional burials is what I've been told. So if a cheap burial is $5,000, a cheap cremation would be $2,500. Unless "they" lied to me. I've never personally priced it.
And she has requested cremation, so I think that the smaller plan will cover that or at least most of it.
You mother-in-law sounds like she wants to be able to feel satisfaction about leaving something to her kids. Allow her the dignity of doing that.
Posted on 3/16/10 at 10:39 am to LSURussian
The number I heard for cremation was $1500. I havent actually priced it. The 1/2 cost of traditional does make sense though.
If we leave things as they are w/ the life insurance, (her kids named benficiaries) would we be leaving them open to creditors trying to collect after their mothers death? By that I mean assets outside of their mothers estate.
If we leave things as they are w/ the life insurance, (her kids named benficiaries) would we be leaving them open to creditors trying to collect after their mothers death? By that I mean assets outside of their mothers estate.
Posted on 3/16/10 at 10:41 am to Chris4x4gill2
quote:
If we leave things as they are w/ the life insurance, (her kids named benficiaries) would we be leaving them open to creditors trying to collect after their mothers death? By that I mean assets outside of their mothers estate.
That life insurance is not part of her estate since it has no cash value. It's not included and the creditors MAY come looking for it but it's been my experience that they have no legal grounds for capturing those assets.
I am not a legal or tax expert but I would get in touch with one.
Posted on 3/16/10 at 10:49 am to Broke
Thanks for the imput guys. I figure we will have to sit down with a pro soon. They (mom and daughters) met with a lawyer on the subject a while back, basically didnt come out of it with anything other than the bank gets the house at the end.
Posted on 3/16/10 at 10:52 am to Chris4x4gill2
quote:
If we leave things as they are w/ the life insurance, (her kids named benficiaries) would we be leaving them open to creditors trying to collect after their mothers death? By that I mean assets outside of their mothers estate.
As long as the debts are not secured or named in the policy, then the beneficiary would be off the hook.
In my opinion, she should keep the policy unless the $40 keeps her from putting groceries on the table. You said she was in bad health, is there someone else in the family who could make the payments? Think of it as a college fund for the girls.
Posted on 3/16/10 at 10:55 am to John Merlyn
Assuming your wife has a sibling, they could each pitch in $20 per month. Well worth it.
Posted on 3/16/10 at 10:55 am to John Merlyn
All good points for keeping it. Looks like I'll be making cuts elsewhere.
Posted on 3/16/10 at 11:07 am to Chris4x4gill2
(no message)
This post was edited on 3/16/10 at 11:09 am
Posted on 3/16/10 at 11:12 am to Broke
quote:
That life insurance is not part of her estate since it has no cash value. It's not included and the creditors MAY come looking for it but it's been my experience that they have no legal grounds for capturing those assets.
It is if she named her estate the beneficiary.
If she named specific a individual(s) or trust as the beneficiary it will pass outside of probate and the creditors can not touch it.
This post was edited on 3/16/10 at 11:13 am
Posted on 3/16/10 at 1:39 pm to Cash
quote:
It is if she named her estate the beneficiary
But I've never personally seen that happen. I always name benes.
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