Need Advice

[TigerGirl1226]

Ok, so last week we got a copy of a life insurance policy for my DD in the mail. I check the envelope and it was mailed from my FILs place of employment. I start to look over the policy and it is a $25,000 policy with FIL as the sole beneficiary.

I am a little curious, so I call DH. He is furious. FIL took out the policy without our permission and has himself as the beneficiary. I started digging on our state's Dept of Insurance website and it turns out this is completely illegal. You have to have the form signed by parents and the parents also have to sign a medical release.

What would you do?

DH already called and asked him to change us to the beneficiaries for starter. He claims that because he pays he has to be the primary and we can be the "contingent", but that still doesn't sit right with me. I already have trust issues with my FIL and this is just about the last straw.

I'm just looking for advice from my wise FV pals.

[Spirit Deer]

I'm trying to figure out why a grandparent who does not have custody of grandchild would need to insure said grandchild's life, but I can't.

Tell FIL you're going to contact the insurance company and tell them to cancel the policy.

[madhen]

That IS a bit creepy. I would definitely call the insurance company and find out how he did it without your consent. I don't know if you can cancel it, because you aren't the person who signed up for it, but if it is true that what he is doing is illegal, you can certainly give the insurance company a reason to terminate the policy.

[Lady_V]

Red Flags!

Have a copy of the state law when you call the insurance company. I know some companies such as Gerber Life allow grandparents to hold policies, but I think that state law would prevail.

For good measure, I would go to the Social Security office and have your DD's # changed.

[TigerGirl1226]

Ok, I still feel really weird about the whole thing, but I feel much better that you are creeped out with me.

[mombottoo]

"The Insurable Interest in a Life Insurance Policy

To stop your good neighbor Sam from taking out a life insurance policy on you and then killing you to get the life insurance money, your neighbor, as the purchaser of the insurance policy, must have an insurable interest in the life of you, the person being insured at the time of application. In dealing with life insurance, a person is deemed to have insurable interest when the purchaser has a reasonable expectation of profit or benefit from the continued life of the insured.

Every state requires that an insurable interest exist at the time of application. Policies issued on lives where there is no insurable interest are regarded as void from the beginning because they are against public policy. They are against public policy because they encourage murder for profit. If there was no insurable interest requirement, some people would be tempted to purchase life insurance policies to collect the death benefit by killing the insured.

A person is always considered to have an unlimited insurable interest in his own life and health. Therefore, the beneficiaries of the policies that an insured purchases on his own life do not need to have an insurable interest. It is presumed that the insured would name as a beneficiary only people who want the insured to live a long and healthy life. A person, therefore, can obtain as much insurance as he wishes on himself – subject to other limits an insurance company might have. For example, insurance companies commonly limit the amount of insurance they will place on a person to that appropriate to his income and life style.

Determination of insurable interest

Courts and state laws have established guidelines for those persons and entities presumed to have insurable interest. They fall into three general categories – relations by blood or marriage, business relationships, and creditors.

Blood or Marriage: People generally have an insurable interest in the lives of their spouses and dependents. Based on this relationship, the general rule of thumb is:
Insurable Interest
Husbands and wives
Parents and children
(including adopted children)
Grandparents and grandchildren
Brothers and sisters
Engaged couples (some states)

No Insurable Interest
Other relatives by marriage
Nieces and nephews
Cousins
Uncles and aunts
Stepchildren and stepparents"
-------------
I am quoting the above from law.freeadvice.com. And, the research I have done for my state agrees with the above. As a grandparent I am within my legal right to take out a life insurance policy on any of my grandchildren so long as they are related to me through blood or legal adoption.

Many grandparents buy life insurance policies in the event that something happens. It doesn't generally mean that the grandparents are hoping something happens to the child and they are looking to get rich off of their grandchild's death. I guess what I am trying to say is that if I decided to buy life insurance for my grandkids, I would hope that my kids' spouses or my kids wouldn't think I was wishing for something horrid to happen. I also would not give my children ownership over the policy, because then they could choose to cash it in for its cash value. Obviously, if I were to buy life insurance it would meant to be used in the event my grandchild died.

I don't know your situation with your fil, but since the papers came to your address it doesn't sound to me like it was something he was trying to hide.

[TigerGirl1226]

"If a family member or other interested party wants to buy an insurance policy for a minor, a parent or legal guardian must sign the application and authorize the release of medical records on behalf of the child."

Louisiana Dept of Insurance

This is the info I am basing my thought process on as far as him not getting permission.

[Greebo]

You checked the State's dept of insurance web site. Now I'd call the dept. of insurance directly and discuss this with them and get their input on your options.

I would *think* that as the parents, you would have to give the OK for grandparents to take out insurance, regardless of insurable interest.

[Greebo]

"If a family member or other interested party wants to buy an insurance policy for a minor, a parent or legal guardian must sign the application and authorize the release of medical records on behalf of the child."

Louisiana Dept of Insurance

This is the info I am basing my thought process on as far as him not getting permission.

Reads like that to me, too.

[thefrug]

How did the FIL get the child's SS#? None of my inlaws know any of our SS#'s. Thats weird right there. I'd definitely get it changed.

[fixer]

If no health problems exist, I don't even see a creepy profit motive in your FIL's actions. I have always believed if someone does something you don't understand, the easiest thing to do is to close your eyes and say "money". That will be the reason most of the time. It would bother me if my FIL took out a life insurance policy on Dw so I can't imagine how you feel.

[TigerGirl1226]

How did the FIL get the child's SS#? None of my inlaws know any of our SS#'s. Thats weird right there. I'd definitely get it changed.

I didn't even think of that!

[Debbie-cat]

The whole situation is scary. I would never, ever leave your child alone with him.

[checks]

It's very odd. I could see if he bought a life insurance policy, himself, and named his granddaughter as beneficiary..... although I believe you have to be 18 yrs. old to be a beneficiary. At least in PA.

Seems like a waste of money. He'll most likely be gone before his granddaughter and then it's void. I am assuming the best, too, that he loves her and would not have evil intentions towards her..??

So, do you think that he understands what the policy is about? Many times insurance agents will take advantage of the elderly and sell them something if they're willing to pay. I would hear his side of the issue before jumping to conclusions. Hubby should have a nice talk with his dad, IMO. Just doesn't sound right.

[Gibs]

I agree with Debbie, that is very very scary, and I wouldnt ever leave my child alone with him either. Deffinately get her ss number changed. Hugs.