There’s a flaw in selling kids whole life policy’s. What happens when Grandpa dies?

[DonP]

Found out in the contract for kids policy ownership reverts to the spouse if the owner dies with Foresters . If the spouse of the owner is deceased then ownership reverts the the insured if of age . If not if age it goes down the line in succession.

 

[WinoBlues]

Though I would just bump this thread. Scanning it, it looked pretty good.

Like many agents I have paid out a number of claims on kids or young adults that started as child riders.

So today I attended a fundraiser for the nephew of a friend. This 19 yo kid is batting Cancer. One is inoperable and now a new type of Cancer just popped up. He has been in the hospital for a while now and is receiving comfort care.

I do not know if he is insured. I do know that his parents are going broke trying to keep one parent with him daily. Go fund me and fundraisers only go so far.

I have always been a fan of child riders but have to admit that I have grown lax, lazy, in adding them. For +- $8.mo there is all but zero reason to not automatically add it if not at least offer it as an option. I am thinking the same for grandkids.

Add, benefits like multiple original face conversations, payor death waivers, auto coverage at x days old and so on.

I so feel for this family.

 

[Allen Trent]

Though I would just bump this thread. Scanning it, it looked pretty good.

Like many agents I have paid out a number of claims on kids or young adults that started as child riders.

So today I attended a fundraiser for the nephew of a friend. This 19 yo kid is batting Cancer. One is inoperable and now a new type of Cancer just popped up. He has been in the hospital for a while now and is receiving comfort care.

I do not know if he is insured. I do know that his parents are going broke trying to keep one parent with him daily. Go fund me and fundraisers only go so far.

I have always been a fan of child riders but have to admit that I have grown lax, lazy, in adding them. For +- $8.mo there is all but zero reason to not automatically add it if not at least offer it as an option. I am thinking the same for grandkids.

Add, benefits like multiple original face conversations, payor death waivers, auto coverage at x days old and so on.

I so feel for this family.

So sad. I personally know 5 young people age 17-23, friends of my son, battling rare forms of cancer. Drs have told them they believe covid infection & vaccinations have triggered auto immune & inflammatory responses that sped up diseases they likely would have gotten later in life. 2 Hodgkin's lymphoma, colon cancer, rare spine cancer in neck, thyroid cancer. A few of these are going through brutal treatments

 

[Tahoe Ray]

So sad. I personally know 5 young people age 17-23, friends of my son, battling rare forms of cancer. Drs have told them they believe covid infection & vaccinations have triggered auto immune & inflammatory responses that sped up diseases they likely would have gotten later in life. 2 Hodgkin's lymphoma, colon cancer, rare spine cancer in neck, thyroid cancer. A few of these are going through brutal treatments

I would honestly move.

This is so uncommon that I think your environment is a major contributor.

 

[PrivClientSG]

Went threw this with foresters . They wanted a copy of death certificate and wanted copy of will and some type of court papers to change owner . It was crazy. The policy basically becomes worthless when the owner dies . The insured can never do anything with the policy as he's not the owner . How do other's handle this on kids policy's when the owner dies? Do any co's have a contingent owner transfer if the owner dies? This is a huge flaw . Any co's allow easy transfer of ownership if the owner dies?

When the owner is not the insured (grandfather owning a policy on grandson), numerous companies allow for a contingent owner to be named. In addition, several companies also have a default -- which you might have to elect out of by naming a contingent owner -- whereas the insured becomes the new owner (if they are not a minor) when the current owner dies (if a contingent owner is not named). Call the carrier, ask to speak with their advanced markets or legal department. The former should be more helpful, LOL. They should be able to walk you through their options. Good luck!

 

[Allen Trent]

I would honestly move.

This is so uncommon that I think your environment is a major contributor.

To where? It is an alarming trend globally. https://www.actionnews5.com/2022/10...-rise-cancer-among-young-people-across-globe/

 

[WinoBlues]

When the owner is not the insured (grandfather owning a policy on grandson), numerous companies allow for a contingent owner to be named. In addition, several companies also have a default -- which you might have to elect out of by naming a contingent owner -- whereas the insured becomes the new owner (if they are not a minor) when the current owner dies (if a contingent owner is not named). Call the carrier, ask to speak with their advanced markets or legal department. The former should be more helpful, LOL. They should be able to walk you through their options. Good luck!

Side note: community property states make a difference as well.

 

[scagnt83]

To where? It is an alarming trend globally. https://www.actionnews5.com/2022/10...-rise-cancer-among-young-people-across-globe/

Rates of cancer have increased across the board.

But a few considerations about that article, its based on the world, not US. And many parts of the world have only recently started accurately reporting cancer deaths.

Also, cancer deaths are not always been known in young people of the past. Modern tech has allowed us to gain more info about deaths without having to do an autopsy. So with a simple blood test we can find cancer deaths now, vs. 20 years ago when an autopsy would have been required.

So that study must be taken with a huge grain of salt compared to the US population.

--

What they have linked to increased cancer rates, without a doubt, time and time again, is the use of petroleum based products in our daily lives. Along with other dangerous chemicals & emissions that are allowed to be used around the mass public. And Im not just talking about energy uses when I say petroleum.

---

If those cancer patients all live in the same area, its very likely there is some type of harmful pollutant in the area.

Cancer "clusters" have been a growing trend since the 80s. When properly investigated, often there is some type of manufacturer emitting something toxic nearby

(I know of a small area in our region where at least 7 different people, all lifelong residents in their late 20s, all within 5 years of each others age, were diagnosed with an extremely rare form of aggressive brain cancer. Less than 1% of all cancers are this type. They had 7 within a 6mi radius.)

 

[Allen Trent]

Side note: community property states make a difference as well.

For something so simple, these kids policies can get complicated. Seen some have to go to probate when owner/contingent owner dies merely to get ownership to the insured who may now be 50+ years old as ownership was never updated.

Seen people that change ownership when kid is 25 or so on single pay MECs only to be upset because they original owner gets a tax notice for the current gains.

Seen grandparents in their 80s go in a nursing home & have to spend down the cash value of grandkids policies they were still owner of

Seen 70 year old people die & still have their parents as owner & bene from the purchase 60+ years prior & the claim goes to probate unnecessarily

Could also see some gift taxes in the future on some of the larger max funding IUL/VUL that parents & grandparents have been doing when they go to change from owning the policy to changing owner to the child as an adult

Many carriers allow the minor to be the owner by filing an UTMA type form that has the minor as real owner & the adult as overseeing policy until the minor is of age. I did this with flexible premium 4% guaranteed annuities I bought for my kids when they were born & their life policies

 

[Lloyds of Lubbock]

Sell a 10 pay with a pda account.
Helps your persistency too.