Friend As Beneficiary?

[HoosierLife]

Insurable interest boils down to what does the beneficiary stand to lose financially from the death of the insured? Or what finacial obligations will they have to pick up due to the insureds death?

Example - You have a policy with "Friend" as a bene. Though they may truely miss you and grieve your death, they have no real financial loss from it. In fact they have a windfall gain, like winning the lottery. In cold hard numbers, they are finacially better off with you dead than you alive. We explicitly try to avoid this. An acceptable bene has a direct and real finacial loss from your death. Spouse, children - they lose your income for bills and raising the family, the financial support you have always given them. A business partner - they may have to buy out your share of the business to avoid your spouse becoming a default partner. Or to help cover your share of business loans they'd suddenly become resposible for. You see where we're coming from here. The Bene isn't really making any money off the insured's death. They're breaking even from lost future finances or sudden gained debt.

Note: This may have less to do with final expense market than traditional life insurance in general.

Ok I get that. The question still remains is will RNA throw up any red flags when/if I change the bene after the fact? I haven't seen the change request form, but I assume it will ask the relationship with the insured.

 

[moonlightandmargaritas]

Ok I get that. The question still remains is will RNA throw up any red flags when/if I change the bene after the fact? I haven't seen the change request form, but I assume it will ask the relationship with the insured.

After the fact, there is nothing they can do. All contract rights - including changing beneficiaries - are the exclusive right of the contract owner.

 

[HoosierLife]

After the fact, there is nothing they can do. All contract rights - including changing beneficiaries - are the exclusive right of the contract owner.

So this is a just a loop hole around this problem?

 

[InsuranceMonkey]

Ok I get that. The question still remains is will RNA throw up any red flags when/if I change the bene after the fact? I haven't seen the change request form, but I assume it will ask the relationship with the insured.

You can change it to your cat and no one will blink an eye or care. It just has to make sense at the time of underwriting. After that, if the client wants to destroy the point and purpose of the insurance in the first place to someone that makes no sense whatsoever... that's their choice.

 

[VolAgent]

You can change it to your cat and no one will blink an eye or care. It just has to make sense at the time of underwriting. After that, if the client wants to destroy the point and purpose of the insurance in the first place to someone that makes no sense whatsoever... that's their choice.

Not that is a little over the top. She just wants it to leave money to a friend that will handle her final expenses. It doesn't fit the standard definition of insurable interest, but it definitely makes sense.

 

[Norwayguy]

You can change it to your cat and no one will blink an eye or care. It just has to make sense at the time of underwriting. After that, if the client wants to destroy the point and purpose of the insurance in the first place to someone that makes no sense whatsoever... that's their choice.

I have always wondered about the cat beneficiary....I have heard of rich people leaving a benefit to a pet. I assume they create a trust with a trustee because my cat does not have any identification how would they claim the funds.

 

[InsuranceMonkey]

Not that is a little over the top. She just wants it to leave money to a friend that will handle her final expenses. It doesn't fit the standard definition of insurable interest, but it definitely makes sense.

Heh - I agree entirely.

I think the reason "insureable interest" came around is based in history. I read that when life insurance first started in England back in the 1700's, people were taking out insurance on people they barely knew. You wouldn't even be aware someone had taken out insurance on you. It was a death lottery. Bad things happened. A lot of "accidents" happened rather than pay premiums waiting for natural death. Clearly this wasn't acceptable, this new "life insurance" was causing a heck of a lot of deaths, or more specifically, murders. Companies started requiring that there had to be some kind of legitimate relationship between the insured and the bene.
And here we are.
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I have always wondered about the cat beneficiary....I have heard of rich people leaving a benefit to a pet. I assume they create a trust with a trustee because my cat does not have any identification how would they claim the funds.

The first company I worked for had a policy that had a trust as a bene. Not uncommon at all. The trust however was for the client's dogs. The trust paid out to a local Humane Society who was to care for the dogs until their natural death. At time of death, remaining funds became a gift to the center. It was a fairly low face amount, like 50k, the client had donated heavily to the center over the years, so it was ultimately approved. Odd case, but it kinda made sense.

 

[HoosierLife]

Does anybody know what the bene change form is called with RNA by chance? I'm lookin but I can't find it...

Nevermimd I think I found it, page 2 lol. RNA seems to have a generic change request form for any changes.

 

[Mattschmidt]

Does anybody know what the bene change form is called with RNA by chance? I'm lookin but I can't find it...

call them, or your upline...I bet they could email one out to you

 

[VolAgent]

Does anybody know what the bene change form is called with RNA by chance? I'm lookin but I can't find it...

Request for change form. 1994-A