Syndicated Financial Columnist, Host of the weekly talk show Steve Savant's Money, the Name of the Game, Scottsdale Arizona
You can purchase life insurance coverage on anyone you share an economic insurable interest, including parents. Of course, they need to sign as the policy insured on the application and have to be mentally competent to do so. Life insurance policies held between different family generations are quite common.
President, The Firm of Steven H. Kobrin, LUTCF, 6-05 Saddle River Rd #103, Fair Lawn, NJ 07410
This is a very common question. The answer is yes. Let me give you an example of what one of my clients did. It was very thoughtful.
My client is a woman in her 30s. She is very devoted to her mother, who is in her 60s. Her mother took great care of her when she was growing up, and now she wanted to pay your mother back.
She makes sure her mother lacks for nothing. She bought her a house, and pays her monthly bills. She bought her a car. She treats her to vacations.
Her whole attitude is that “my mother took great care of me, and now that I have the money, I’m going to take great care of her.”
Of course, all the money she is spending now on her mother, is money she cannot spend on herself and her own future. She is basically depleting her retirement fund for her mother’s care.
She came to me and basically said that she would like to get reimbursed at some point for the money she is spending on her mother. She will happily provide for her mother as long as a mother is alive; however, when she dies, she would like to have an insurance benefit paid to her to replenish her own retirement fund.
The goal was to get a life insurance company to offer a policy on her mother for that reason. And I did it.
It took some digging, but I did find a life insurance company to buy into that concept. They did set a limit on the face amount, but it was reasonable as far as what my client wanted to accomplish. Certainly a win-win situation.
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My client is a woman in her 30s. She is very devoted to her mother, who is in her 60s. Her mother took great care of her when she was growing up, and now she wanted to pay your mother back.
She makes sure her mother lacks for nothing. She bought her a house, and pays her monthly bills. She bought her a car. She treats her to vacations.
Her whole attitude is that “my mother took great care of me, and now that I have the money, I’m going to take great care of her.”
Of course, all the money she is spending now on her mother, is money she cannot spend on herself and her own future. She is basically depleting her retirement fund for her mother’s care.
She came to me and basically said that she would like to get reimbursed at some point for the money she is spending on her mother. She will happily provide for her mother as long as a mother is alive; however, when she dies, she would like to have an insurance benefit paid to her to replenish her own retirement fund.
The goal was to get a life insurance company to offer a policy on her mother for that reason. And I did it.
It took some digging, but I did find a life insurance company to buy into that concept. They did set a limit on the face amount, but it was reasonable as far as what my client wanted to accomplish. Certainly a win-win situation.