Client Wants to Insure her Brother...

[Norton]

so I got a call from my local client the other day, and she tells me that her 40 year old brother living in NY isn't good with money or planning, and she wants to get life insurance on him. Their parents have died and she says "I'm the one who's going to end up footing the bill for his funeral and final expenses someday, so I'd like to get insurance on him now."

What would you do in this case? They're not really close, and she doesn't trust him to get a policy and pay for it on his own. I told her she can't just insure a family member without his participation on some level, but I'd like to know what you all think and how you'd handle the request.

 

[DHK]

She can be the owner and the beneficiary. He can be the insured. Just explain what the policy is for, should underwriters ask and make sure it's an appropriate amount based on the purpose.

All he has to do is agree to it and do the medical exam - depending on the kind of policy you're selling.

 

[Newby]

so I got a call from my local client the other day, and she tells me that her 40 year old brother living in NY isn't good with money or planning, and she wants to get life insurance on him. Their parents have died and she says "I'm the one who's going to end up footing the bill for his funeral and final expenses someday, so I'd like to get insurance on him now."

What would you do in this case? They're not really close, and she doesn't trust him to get a policy and pay for it on his own. I told her she can't just insure a family member without his participation on some level, but I'd like to know what you all think and how you'd handle the request.

That's one of the common situations when people do funeral PreNeed insurance plans. She can take one of those policies without his knowledge or participation. Happens all the time.

And it will be based on the state she is in when she buys it which is good since he's in the worst insurance state in the world.

 

[SammyJ]

Newby a preened policy is an ins policy correct? Why doesn't the insured have to sign it? In reality she could take out a policy online that requires an electronic signature as long as she has all his info. I assure you a great many wives do it on procrastinating husbands.

 

[Newby]

Newby a preened policy is an ins policy correct? Why doesn't the insured have to sign it? In reality she could take out a policy online that requires an electronic signature as long as she has all his info. I assure you a great many wives do it on procrastinating husbands.

Yes PreNeed insurance is a version of whole-life insurance. But the insured doesn't need to sign anything or even be aware of the policy. That's one of the features of it. One of the reasons it exists is because of irresponsible family members leaving a burden on their more responsible sisters, mothers, nieces, etc (usually female) that get a funeral bill dumped on them.

PreNeed allows you to buy a small whole-life policy on any family member that is intended to cover their funeral/cemetery/cremation costs. In some states they can only be sold by licensed funeral directors. In most states agents who work along with funeral homes sell them. A few companies like NGL also offer a version of them that is sold with no funeral home involvement at all.

 

[jboussea]

That's one of the common situations when people do funeral PreNeed insurance plans. She can take one of those policies without his knowledge or participation. Happens all the time.

And it will be based on the state she is in when she buys it which is good since he's in the worst insurance state in the world.

Doesn't the insured have to sign the life insurance application?

Edit: I just saw the last post

 

[Newby]

Doesn't the insured have to sign the life insurance application?

Edit: I just saw the last post

No. with PreNeed about half the time it's not someone buying a policy on themself. It's someone buying a policy on a family member.

Sometimes the person they are buying the policy on is terminally ill and just never did Preplan for themself. So their spouse or kids or someone has to do it for them as their health goes down.

Other times the person they are buying the policy on is not sick at all. They are just not a responsible person.

I've had a few buy policies on people who were incarcerated.

I've had wives buy policies on husbands (and even ex-husbands) because he was stubborn and was going to ignore it and dump the responsibility on their kids.

Usually the terminal ones, the irresponsible ones or the stubborn ones are never consulted or told that the policy exists. They don't need to sign anything.

PreNeed insurance applications are designed so there is only one signature needed. Either the insured signs if it's for him. Or the owner signs if it's for someone else.

 

[TampaHound]

Maybe it's just me but I would think that both Pre-need and Final Expense insurance would have exceptions for being incarcerated?

 

[Newby]

Maybe it's just me but I would think that both Pre-need and Final Expense insurance would have exceptions for being incarcerated?

No. PreNeed does not. Most FE companies screen for it though.

 

[childress]

If she is paying for the insurance then she can title herself as the beneficiary and yes he can be insured. It completely depend on the health conditions of his brother and what policy she is interested in