Life Insurance?

Question

Am I overreacting or is something really wrong here? My mother in law (husbands mom) went and took out a life insurance policy on our 4 month old baby boy. Instead of making my husband which is the father of her grandson the primary beneficiary she made herself the PB. She also has taken out one on her two nephews, my husband, and my husbands dad which is in PRISON for the rest of his life. And on all of the policies she has made herself the Primary Beneficiary, am I overreacting or is something really wrong with this picture? (The money issue is not a problem with me, it just erks me and it's kind of weird)! Am I overreacting?

I live in Mississippi. But my mother in law lives in Louisiana.

Answer 1

yes it is sort of weird...normally when u take out life insurance u would want the PB to be the father or mother...since the grandmother has a shorter life expectancy then the grand child...and it is sort of weird since ur baby is only 4 months old..i mean its not like he's gonna die any time soon he still has his whole life ahead of him...if anything the grandma should take out life insurance on herself and have the PB being the baby!

Answer 2

The part of this question that has me wondering is the statement that she's also taken out a policy on your husband's father (in prison for the rest of his life). If she took out the policy before he went in, I can understand. However, I know of no insurance company that will put a policy in place on a felon IN prison once they are there unless he's in some sort of a group policy, and even then I haven't heard of anyone covering folks in prison -- too much chance of the insured not making it back out in one piece.

There's no problem with her being the beneficiary: in fact, it may be a good thing. Does she have a living trust? Is the beneficiary actually in a trust? There are a whole mess of questions that need answering before I could say is this "weird", but at first blush, it looks more like grandma is trying to be helpful (I'll bet that most likely the policies aren't term ones and that they have some cash value buildup in them) . In fact, if she has taken out a policy on one grandchild many if not most insurance companies would want to make sure that she has also insured the other grandchildren, if any, and she has apparently done so.

Answer 3

I wouldn't consider it weird. She is taking care of what needs taking care of. Is she the kind of person who would pay the funeral costs if the child did die? If so, then it's ok.

The bottom line is that if she is the paying party, then she probably owns the policy and all rights of designating beneficiary. However a parent had to sign for her to take out the insurance policy in the first place.

If this thing really bothers you, get your own policy, with your husband on a rider, and children on a rider, to ensure that your interests and needs are met. You'd be surprised what $50 or $75 a month would get you on a good lenght of term life.

Answer 4

What state are you in? In PA (with my company anyway), a grandparent can't take a life policy out on a child WITHOUT parental permission or court documents proving guardianship. Same with her son (and the husband) because I assume he is an adult - there are questions that only the proposed insured can answer regarding his or her health and possible drug use, etc. He would also have to be the one to authorize the request for medical records. Something definitely does NOT sound right. My dad pays for life insurance for my children (as a gift) but I am the beneficiary and owner. I would look into whether she really did take these policies out, and if so if it was legal for her to do so.

Answer 5

term insurance -the place insurance is obtainable for a special era (commonly a year, or for point classes which incorporate 5, 10, 15, 20 even 25 and 30 years) the place a loss of existence income is only paid to the beneficiary if the insured dies during the specified era. on survival no longer something is payable everlasting existence insurance is a sort of existence insurance which incorporate finished existence or endowment, the place the coverage is for the existence of the insured, the payout is certain on the tip of the coverage (assuming the coverage is stored cutting-edge) and the coverage accrues funds cost.

Answer 6

First you should get your own financial house in order.

Do you and your husband have adequate insurance coverage (life, disability, specified illness coverage)?

Don't worry about your in-law taking out a policy on your husband and your children. The grandkids will probably outlive their grandmother. If so, and if these are cash value policies, your in-law may pass those policies on to your husband or the grandkids. If they are term policies, your in-law is just wasting her money.

She may not be looking to PROFIT from the death of her family members, she may be looking for ways to help out in the event of an untimely death (and help pay for funeral expenses) or may be looking to help her family members build a solid financial future. Life insurance is ONE way to help (but not the only way).

Your husband should have a talk with his mother and ask her intentions with these policies and what she intends to do with the polices if she dies before her family members do.

She may be smart having a policy on her husband in prison. He can't get a policy now.

Go talk to an agent or financial professional.

Good Luck

*

Answer 7

It is fine for her to have these policies, not wise but fine. She is probably not trying to collect any large sums of money from these I am sure. She may have bought them for peace of mind it may give her some feeling of self-worth to know that she is protecting her family. The smart thing to do would be for you and your husband to pull out a 20-30 year level term policy (depending upon your current financial situation) that does NOT convert to permanent insurance. Then tell your Mother in Law to invest the money she is probably wasting in a cash value life policy into a 529 savings account for her grandchildren. There are huge tax advantages for her and it is not locked into some silly policy that does little to no good for your children.

Answer 8

I might suggest you to try this web site where onel can get rates from different companies: http://INSUREQUOTE.US/index.html?src=2YAslfouSR46

RE :Life Insurance?
Am I overreacting or is something really wrong here? My mother in law (husbands mom) went and took out a life insurance policy on our 4 month old baby boy. Instead of making my husband which is the father of her grandson the primary beneficiary she made herself the PB. She also has taken out one on her two nephews, my husband, and my husbands dad which is in PRISON for the rest of his life. And on all of the policies she has made herself the Primary Beneficiary, am I overreacting or is something really wrong with this picture? (The money issue is not a problem with me, it just erks me and it's kind of weird)! Am I overreacting?
Update: I live in Mississippi. But my mother in law lives in Louisiana.
Follow 15 answers

Answer 9

first of all, life insurance for more than burial cost on a child is a waste of money. Life insurance should be used to cover a persons wages and pay their debts for up to a year. but maybe she looks at this as a way of helping, an odd way, but a way none the less. I agree, it is weird but some people just do things we don't understand. What kind of relationship do you have with her? Can you tell her it makes you uncomfortable? She might be able to give you a reason for her purchases. If you can, talk to her.

Answer 10

i never heard of someone with so many life insurance policies, but its fine. Just when someone dies she gets the money. I did that on both my kids. Money goes to me.

Basically if she is paying for the policy she SHOULD be the beneficary.

if anything was wierd about it you wouldnt know she did it. The fact that you know she did this then its fine. If she was going to do anything to your babies you would not even know she opened any policies. She would have done it sneaky without telling you.