Should I own my own life insurance policy?

Question

Right now, my husband has insured my life and I've insured his, thinking this would eliminate any insurance getting tied up in escrow. Is it the best way, or should I actually be the one insuring my life and my husband the one insuring his?

Yikes! I mean 'tied up in probate.'

I own the policy on his life and I'm the beneficiary. He owns the policy on my life and he's the beneficiary.

Answer 1

I would change the policy owner to whoever is the one being insured. Base on your description, it seems that you are the policyowner of your husband's life insurance and your husband is the policyowner of your life insurance.

Since you are both married, it doesn't matter if you should own your own life policy. At least both of you can insure that you are the name beneficiary on the policy.

Answer 2

I believe every adult should own their own policy - because only the policy OWNER can change the beneficiary clause. It has NOTHING to do with "getting tied up in escrow". The beneficiary gets the payout, PERIOD.

If your husband owns the policy on your life, and you divorce him, he can change the beneficiary to his 18 year old girlfriend, so if you kick off, his girlfriend gets the money. Just an example. But divorce doesn't change the fact that he owns the policy, and it WON'T give you any beneficiary naming rights - it's ONLY up to the owner.

Answer 3

Cross ownership is the best way to go if the individuals are going to own the insurance. The problem with self owned life insurance is that you need to look at the effects on your estates if something happens to one or both of you.
Self owned life insurance means that the death benefit is included in your estate at death. This could cause an estate tax to be due either to the federal and/or state governments. If you own the policy on your husbands life and he dies you get the death benefit and it is not part of his estate. The same effect if he owns the policy on your life.
In the event of a common disaster the death benefit on both policies will end up in the second estate.
The way to avoid this happening is the have to life insurance owned by a trust where the death benefit is paid to the trust, the survivor has the right to income and principle as needed and at death anything remaining passes to the children outside of the estate and inheritance tax laws. See a good CPA or estate attorney to investigate this for your particular situation.

Answer 4

I own life insurance on myself also. Just in case something happens, I want my husband and son to be taken care of. Additionally, I have a very large insurance policy through my work, but if for some reason I leave, I will not be able to take it with me. I would buy extra, it can't hurt and in the long run, while you don't want to think about it, it is worth it.

Answer 5

I would think that on each policy you would have the others name for the benefit. A lot of couples do this and if you are not sure a quick call to the insurer would provide you with the firm advice you need.

Answer 6

<>It doesn't matter who has the insurance on whom, unless you harbor concerns about what might happen in a divorce or separation. In that case, you should carry your own policy. Additional insurance can be a good thing, but you might want to talk to a financial advisor about options. For instance, if you are doing well financially, you might want to consider an investment policy, such as whole life, which can pay you back in later years.

Answer 7

Are you the owner or the beneficiary of his policy? Or both. You should be the owner of your policy and he the owner of his with eachother being the beneficiary.

Answer 8

Life insurance with cash value don't pay out cash value when you die! They say its a good way to build savings! How is that so if you lose it all and it doesn't go to anyone when you die? People say you can borrow it. Why do I want to borrow my own money that I paid for? Cash value = scams!