by Guest » Fri Jun 27, 2014 10:59 pm
My mother passed recently. She took out a life policy on her nefew when he was 5 who she took in and raised. He is now 40. When I contacted the insurance company to let them know of my mother's passing and that I would be taking over the policy and paying the premiums, they indicated as beneficiary of her will the owner of the policy who now be her nefew, the insured. How is this possible when she has paid on it for the last 35 years that it would not go to her estate/myself as beneficiary?
Posted: Sun Jun 29, 2014 02:58 pm Post Subject:
How is this possible when she has paid on it for the last 35 years that it would not go to her estate/myself as beneficiary?
No one insured has died, only a policyowner, that's why you don't get any money. The language of many life insurance policies will state that if the owner dies, the insured will become the new owner.State laws may have something else to say about property rights, but we don't know what state is involved. And state law would most likely have nothing to say about making you beneficiary of the policy.
Posted: Tue Jul 01, 2014 01:03 am Post Subject:
I am not wanting to get any money on it, I just wanted to continue the policy / payments since I am her benificiary of her will and I was told that that policy was part of her estate.
Posted: Tue Jul 01, 2014 08:49 pm Post Subject:
You did not read my post. Normally a life insurance contract has a provision concerning ownership that states (words to this effect) "If the owner is not the insured, and the owner predeceases the insured, the ownership of the policy will transfer to the insured."
It is possible that the contract states something else: "If the owner is not the insured and the owner predeceases the insured, ownership of the policy will transfer to the estate of the deceased owner."
Either way, as "beneficiary of a will" that alone does not make you the new owner. Not unless the probate court chooses to do that. If the policy does revert to her estate, then the appointed executor or administrator of the estate is responsible to make the premium payments with estate assets, until such time as the court divvies up the estate -- which could take over a year to decide.
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