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    binny4moi's Avatar
    binny4moi Posts: 1, Reputation: 1
    New Member
     
    #1

    Aug 27, 2008, 07:44 AM
    My husband is retiring from work when he turns 65 next month. He has a life insurance policy from his employer for 80,000 which he is eligible to convert but it will cost 314 dollars a month in premiums. He has had cancer, is also on Lipitor and is bipolar so applying for a new policy will involve underwriting. I want a policy which would have my son as the beneficiary in order to provide an inheritance for him. Is it worth it to try to apply for a new policy and also is a life insurance policy a good way to generate an inheritance for my 30-year-old son? Thanks.
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
    Computer Expert and Renaissance Man
     
    #2

    Aug 27, 2008, 08:04 AM
    First its not a good idea to piggyback your question on someone else's. This can lead to confusion. You should start a new thread. So I've moved your question to its own thread.

    Is this a term life or whole life policy? If you have no other assets and can afford the premiums, then converting this policy may make sense. I would still shop around first and see what else you can get.
    excon's Avatar
    excon Posts: 21,482, Reputation: 2992
    Uber Member
     
    #3

    Aug 27, 2008, 08:38 AM
    Hello binny:

    I don't think anybody is going to sell him a life insurance policy when he has cancer. Therefore, I'd absolutely hold on to the one you've got. Sure, it'll give a nice start to your son. Plus, I think he can change the beneficiary anytime he wants to.

    excon
    jasking's Avatar
    jasking Posts: 9, Reputation: 1
    New Member
     
    #4

    Sep 10, 2008, 02:17 PM
    The intent of a life insurance policy is to provide funds for the beneficiary to keep him/her in the lifestyle to which he/she has become accustomed by virtue of the financial support of the insured person... not to provide an inheritance. Therefore, if your son is dependent on your husband's income, keeping a life insurance policy with your son as the beneficiary is a sound choice.

    If your son is independent, though, you'll be spending a lot of money to continue a policy that isn't really need based... not a wise choice.

    If your son is independent, you'd be better off putting that $314 per month into some kind of mutual fund or other interest earning account with your son named as beneficiary. In that case, there'll be estate taxes due when your husband dies and ownership goes to your son, but, in the case of the life policy, although no tax would apply, what happens if your husband lives a lot longer? Either you'll wind up paying bigger bucks for a fixed amount of "inheritance" or you'll later not be able to afford to keep the coverage, let it lapse and get no benefit from it whatever.

    Personally, I'm not a big believer in inheritances... I go with the "God bless the child who's got his own" philosophy. People who depend on a future inheritance generally turn out to be bad managers of the money they have currently... a trait that will not serve your son well.

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