I am executor of my aunt's estate. She was owner of a life insurance policy (no contingent owner) on her husband who is still alive. I am the beneficiary. Her will stipulates that I am the beneficiary of all of her estate as well. I believe that the ownership of the policy insuring her ex-husband passes to the estate but the insurance company is saying that since he is over 18 and the insured, that he must become the owner. The policy was established when both she and he were adults; he was not a minor.
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1Can you add a country tag– DheerApr 14, 2020 at 2:18
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1 Answer
My guess would be that you got that information by calling a toll free number for the insurance company where you're less likely to get people used to dealing with non-standard circumstances like yours. Them saying he has to become the owner is laughable...why stop at the insurance policy?
If you're the beneficiary of your aunt's entire estate, then, there is no ambiguity. All that was hers becomes yours including this life insurance policy which is an asset just like her car, house of favorite slippers passed to you. The fact that it covers her ex-husband's life is immaterial. However, you should verify it was taken out properly. Since they were married, she definitely had an insurable interest at the time the policy was written, but I believe she would have needed his consent to take out the policy (you'll need to double-check this).
Absent any irregularity in how/when the policy was written, there should be no confusion, although since we're talking about an insurance company you might need to get a lawyer involved to make this point clear and avoid their run around by design.
I should add that life insurance policies are tradeable assets which people sell (I'm only aware of this when the insured and policy owner are the same person) to total strangers who then make the premium payments until the covered person passes (quite a morbid business if you ask me). If you do not wish to assume payments and find yourself in the weird position of waiting for/checking on someone to die, you might be able to sell it for cash depending on your country/jurisdiction (to my knowledge, it is legal in the US, parts of Canada, UK and Australia)
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Even if the practice you mention in the last paragraph is in some parts of the developed world "not illegal", I would hazard to opine it is everywhere immoral...– StianApr 14, 2020 at 8:59
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Well, its not a business I would get into, but i'm not sure I would go so far as to call it immoral. For seniors who have paid premiums for decades, this unsavory business model affords them a means to benefit from the policy while they're alive. Imagine an 80 year old who has paid premiums on a policy for 50 years, and either (a) has no dependents, (b) can't afford to continue making payments or even (c) is on the brink of being destitute. Is it immoral to provide a means for them to benefit from the policy while they're alive?– WittyIDApr 14, 2020 at 17:18
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People who are terminal sometimes sell their life insurance policies for the cash to cover medical or funeral costs in the US.– mkennedyApr 14, 2020 at 19:15
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@wittyid Selling your own isn't what I protest. That should be possible anyway, you can release it to the assurer for a fee at the minimum. It's the selling of others' that is morally questionable, at least in my honest opinion. If anything goes as long as people are destitute you could argue the morality of child prostitution or murder. It certainly happens through poverty but that doesn't make it ok. But we digress, and are far from the point of order. Let's agree to disagree.– StianApr 14, 2020 at 23:57
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@StianYttervik You used a flawed analogy to support a reasonable argument. In the crimes you mention, there is harm being done to a victim. There isn't here unless you assume the purchaser murders the person covered by the policy to accelerate a payout. Lets remember that a policy cannot be taken out on a person's life without their consent. Maybe this is solved by granting the covered person a right of first refusal prior to the sale of the policy to a third party...maybe it isn't. Morality is internal to the individual, so as you suggested, lets agree to disagree.– WittyIDApr 15, 2020 at 17:15