Best Child Policy Structure

Jul 3, 2015

  1. DFW
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    DFW Expert

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    Parents want to set up 10 pay WL for 5 year old with no intentions of touching for 60+ years. Questions...

    1. Who should be the owner...child or parent? First thought is to name parent as owner but ON application has no place for "contingent owner". (parent will be dead in 60 years) Assuming ON has a form but could not call today to get answer and waiting 3 days for answer will drive me crazy? Wasn't able to find anything on website for contingent owners either.

    2. Off hand, anyone more competitive here than ON for 10 pay on a child?

    I appreciate any input.
     
    DFW, Jul 3, 2015
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  2. UW Guy
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    UW Guy Super Genius

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    Parent needs to be the owner, child can't own as they are a juvenile (and thus cannot enter into the contract). Child can take ownership when they become an adult (or age 21, 25, etc).

    It's not crazy to be done funding it before they hit college. It might be ideal but she what they're financial issues are.
     
    UW Guy, Jul 3, 2015
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  3. Glassesdude
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    Glassesdude New Member

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    Like UW Guy said and I believe Mass Mutuals 10 pay is projected to come out ahead as soon as it's paid off.
     
  4. meclimit
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    meclimit Expert

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    Just put in the contingent owner in the notes section of the application (that always seems to work -- otherwise a contingent owner can be designated on the change of owner form). But a word of caution -- as UW Guy said -- a child cannot own a policy outright. So name the other spouse or a trusted family member as the contingent owner and, when the child turns 18, either change ownership to the child or name the child the contingent owner. You could set this up as a UTMA account (in which ownership passes at age 18 or 21 depending on state law to the minor), but then that would have potential college financial aid implications.
     
  5. BNTRS
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    This is not something that needs to be set in stone at application time. You can take the app, get the ownership form that allows you to name a contingent owner, and make this "change" while the case is in the new business/underwriting process.
     
    BNTRS, Jul 5, 2015
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  6. aclaro
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    aclaro Super Genius

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    Definitely take a look at MassMutual 10 pay. I'd also put on the guaranteed insurability rider.
     
    aclaro, Jul 5, 2015
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  7. HoosierLife
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    HoosierLife Want to write $20,000+ Guaranteed? bit.ly/learnfe

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    What's a quote on 0MNT 10 pay with Mass Mutual for $25/50k?
     
  8. scagnt83
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    scagnt83 Worldwide Expert of Everything

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    Didnt I already give you quotes for those amounts in a different thread? Or was that a 20 pay?
     
  9. pfg1
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    pfg1 Guru

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    When I do a policy on a child, I explain how the parents can change ownership to the child as such a point they feel they want to - if they want to. Personally, I would not automatically "plan" to have the policy go to the kids at a certain time when you set it up(ie: utma, etc) alot can happen in 10-15-20yrs. They may not want the child to have the policy at that time, and if they do...they can pass it over. Just keep in mind on ownership transfer there may be a tax implication.
     
    pfg1, Jul 5, 2015
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  10. scagnt83
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    scagnt83 Worldwide Expert of Everything

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    I totally agree. Give a 18-25 year old $10k-$30k and guess what will happen most of the time.

    That is why a 10 or 20 pay works well. The parents can keep ownership until the kid is responsible enough to own the policy themselves, but they will not be locked into premiums for that entire time.
     
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