Life insurance question on the DL (buy, bill, used, difference)

[jkmewright]

I am recently divorced and in our decree my ex has to keep 100k on himself for our son. I am not sure if he will keep this up and I would like to get a policy on him myself. Does anyone know if it is even possible to get a policy on another person without a medical exam? I would like for him to know nothing about this and decide to drop the coverage he is supposed to keep. I realize that if he dies and both policies are up to date our son will get double BUT my worries is that if I don't do something, if he dies and our son gets nothing and college is expensive! I was able to get 20 year term 100k ACCIDENTAL but as his father passed away @ 53 (he is 42) of a heart attack I am worried about health insurance as well. Any ideas? Thanks!

[Janipoo]

I am no expert just giving an opinion. But I would think that you could not get insurance on your ex husband since you are no longer married to him. If you have an applical relationship you could try to talk to him and see if he would sign for you to get it in your son's name. If it is in the degree he is bound to keep the insurance policy up to date and I would think that any decent parent would do this for their child. If you are really determined to get a separate policy than I would talk to your divorce lawyer.

Just my two cents for free!

[jkmewright]

Thank you Janipoo We did not have an amicable seperation and the word decent is iffy on a good day when it comes to any money or responsibility issues. The lawyer is no help as they were supposed to demand and provide those insurance papers to me and I have yet to see anything more than my bill from them. So... I may have to get him to sign but I was trying to avoid that.

[square peg]

Insurance companies will write a policy and designate a beneficiary only if an "insurable interest" exists. If I were to take out a policy on you, jkmewright, and something happened to you, they wouldn't pay because I have no financial interest in whether you live or die. You're cool with me on this forum, but that won't cut it with the likes of Metropolitan, etc. But because you have a son together, any insurance company will clearly see that a policy on your x is for a legitimate reason.

As for the limits without needing a physical, I'm not so sure. Some companies may offer 100k of coverage by only answering questions, but most will not.

Hope this helps! / Jim

[newyorkjetsfan74]

just whatever you do stay away from trash value , whole life insurance

[jkmewright]

I am thinking 20 year term. At that point my son would be around 24 so college and most large financial burdens I hope would be over.

[lgauv]

Since we are on the topic of life insurance, can someone please enlighten me on the pros and cons of borrowing from your life insurance to pay for a house? I'm debating whether to get a mortgage or just borrow from my life insurance.

Thanks in advance.

[square peg]

I'll try. There are 2 kinds of life insurance. One is whole life, which builds a cash value over many years. Usually there is little or no cash value in the first five. When you pay your premiums you are buying coverage in the event of death and you are also *slowly* building a cash value that can be used to pay the premiums in your advanced years, borrow against, or you could just plain cash the whole thing in - which will cancel the policy. If you borrow, I think the rate of interest is around 2 - 4%. Maybe that's changed in recent years. In the 50s and 60s these policies were very popular; not so today. If you should die while there is additional cash value accrued on a policy, that amount will be added to the face value. If there is a loan against the policy, that amount will be subtracted from any additional sums.

The other kind is term insurance. You are buying coverage in the event of death only and your premiums are much lower than with whole life. The modern theory is that you will invest the difference in higher yielding funds if you buy your insurance privately. If your employer buys it for you there is nothing but a death benefit. This type of insurance also has an expiration date - possibly 10 or 20 years. Maybe yours is a 'par' company, meaning they pay interest on your premiums and you might have enough cash value built after ten years to buy a vacuum cleaner with, but certainly not a house.

You can't borrow against the face value of either, unless you have built up a cash value over about 25-30 years with the whole life policy and that cash value is equal to the face value. The face value is the amount you are insured for, say $100k.

If your parents took out a whole life policy in this amount when you were an infant you might have enough to put toward that house. Check with your agent and you'll get the answers you're looking for. good Luck!