Insurable Interest: Girlfriend

[Vinny B]

Hi All,

I have two term policies [ING and Banner]. 250k each. I got licensed and the first polic[ies] I did were for myself. First was ING for 250 through Bisys [all online submission]. When ask for bene I put "other" since that was the only choice. When they questioned this, I told them it was my girlfriend...then fiancee. Is she? Not really. I told them we've been together for 10 years and lived together for five and now live separately. If and when...maybe we'll be married. That is true. They issued the policy. One year later, got another for 250k from banner. Said fiancee...issued.

Here's the deal:

I have asked everyone I know in the biz and they say "no problem".

Well, unless someone has been through the same exact scenario [through the death and payout], how do you know? You really don't. I know I'll never know if I'm hit by a truck tomorrow if they payout, but while I'm here, I'd like to know I did as much as I could.

Couple thoughts:
Just b/c the insurance companies issued the policies doesn't mean they'll pay, right?

What about a married couple who split and the husband continues paying for his ex?

To me, that's a similar scenario to me and g/f.

I know, marry her and no problem, right? Well, insurance problem anyway

I have no will. If I created one, would that make a difference?

This is also to help me when I'm out there talking to prospects as well because I often read the phrase "after a lot of...we got the policy issued." That sounds like you got one over on them or sold them on issuing the policy. I don't think you should have to convince the company to insure. Am I wrong? Or are they just now bound to pay b/c it's a contract...period?

Very much appreciated,

Vin

 

[arnguy]

We used to have a guy named James on here who is a real maven on Life Insurance. I'll venture to say that there should not be a problem. After two years a policy is not contestable except for fraud. Also, anyone can be named a beneficiary after the policy is issued so the status of the beneficiary as having an insurable interest, in my opinion, should not come into play. I hope some of the guys who write LI on a consistent basis will chime in and correct me if I am wrong.

Also, the Life Insurance contract is not affected by probate nor by a will. It does not pass through the estate.

 

[Dave020]

Life insurance requires the beneficiary to have an "insurable interest" only at the time the policy is issued. It does not require a continued insurable interest or insurable interest at the time of claim.

That is why it is important for people to review their beneficiary designations on a regular basis.

Generally life insurance companies see an implied insurable interest for family members (siblings and immediate family), spouses, children, domestic partners and anyone who is financially dependent on the insured. But again, this only needs to exist when the contract is issued.

Whoever is listed as beneficiary on a life insurance policy at the time of claim, whether or not the currently have an insurable interest, will receive the death benefit.

 

[xrac]

They issued the policies you are the owner. She was your girlfriend, you had a relationship, an insurable interest. I don't see a problem unless it is the fact that it is term and the policy will eventually lapse unless she or you kick the bucket first. You weren't asking the question because you might assist her on that issue were you??????!!!!!!!

 

[Newby]

A will does not affect who your insurance company will pay. If the named beneficiary is living when you die, they will be the one to get paid. Even if they are your ex-wife and you new wife was paying the premiums.

Your will only affects things that pass through your estate. One of the benefits of life insurance is that it doesn't pass through your estate (unless you have no named living beneficiary.)

 

[Dave020]

It't not that uncommon. Spouses insure each other and each owns the others coverage. They split up and spouse A keeps the insurance on spouse B and pays the premiums.

Years later spouse B dies and spouse A collects on the life insurance, even if A has not had any contact with B in years.

Insurable interest on life insurance only has to exist at the time of the issue of the policy.

 

[SportsNut]

Spouses insure each other and each owns the others coverage. They split up and spouse A keeps the insurance on spouse B and pays the premiums.

Years later spouse B dies and spouse A collects on the life insurance, even if A has not had any contact with B in years.

Sometimes there is a complication with this when the gunpowder residue from the explosion is evident...

The ex-spouse death expert... Drew Peterson, could likely add some valuable points to thsi thread.

Seriously, if one discloses that the ben is gf, and the company issues the policy, there is nothing to contest. If you were to state fiance', and that was not true, then there are grounds for contestability of an insurable interest, if this was witin the first two years of the policy... However, I think this is unlikely as long as there is nothing susupicious about the circumstances of the death.

BTW, you aren't expecting her to attempt to get rid of you, are you...?

 

[LGilmore]

Vinny,

How could you get licensed and not know this?

I've been the last person a client talked to before he killed himself a short while later, exactly one day after 2 years of the policy date. The carrier paid within 5 days to all listed beneficaries. Good carriers pay and pay quickly.

 

[bobson]

Vinny,

How could you get licensed and not know this?

I've been the last person a client talked to before he killed himself a short while later, exactly one day after 2 years of the policy date. The carrier paid within 5 days to all listed beneficaries. Good carriers pay and pay quickly.

I've always wondered how everyone settled on two years. Why not 1 year, why not 3?

 

[Vinny B]

Thanks to all for the detailed answers...and some laughs.

I wish the other sites I visited were as informative and helpful!

Regards,
Vin