Late husband's life insurance from childhood

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duffyinvestor
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Late husband's life insurance from childhood

Post by duffyinvestor »

So my husband passed away in February 2020. My late husband's parents had some sort of life insurance policy on him since childhood.
He was 44 when he passed away. I think this is just super strange, he never mentioned it.

They are not financially astute, house is falling apart, living on social security, no savings I would wager at this point. Finally just did their will last year (FIL is in his mid-70's).

I wonder what kind of whole life insurance they were sold. Glad they have the money sort of, it's just very strange.
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Stinky
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Re: Late husband's life insurance from childhood

Post by Stinky »

duffyinvestor wrote: Tue Jun 02, 2020 8:57 am So my husband passed away in February 2020. My late husband's parents had some sort of life insurance policy on him since childhood.
He was 44 when he passed away. I think this is just super strange, he never mentioned it.

They are not financially astute, house is falling apart, living on social security, no savings I would wager at this point. Finally just did their will last year (FIL is in his mid-70's).

I wonder what kind of whole life insurance they were sold. Glad they have the money sort of, it's just very strange.
Sorry for your recent loss.

It’s interesting that his parents still had life insurance on him. It’s probably a pretty small policy - maybe $5k or $10k.

Are his parents still the beneficiary?
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mhalley
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Re: Late husband's life insurance from childhood

Post by mhalley »

I was about 30 when I discovered my mom still had a whole life policy on me. I cashed it out and gave her the money as by then I had much larger policy in place. I can imagine a child never thinking to ask and parents never talking about such a policy, as money is still somewhat of a taboo topic in many families. I agree it was probably only 5 or 10k, sounds like the parents might need the money.
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KlingKlang
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Re: Late husband's life insurance from childhood

Post by KlingKlang »

The first thing that comes to mind is Gerber Life Insurance. They've been running TV ads for decades urging you to "protect and provide for the future of your child". I doubt that the majority of those that purchase it have any idea what it really is. As already mentioned, it's an asset that would be very easy to forget about.
adamthesmythe
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Re: Late husband's life insurance from childhood

Post by adamthesmythe »

Not strange at all, small life insurance policies are pushed on new parents and have been for decades (think Gerber).

I have one, somewhere, and if I find it and it's not too much trouble I would cash it in.

(Retired now, by the way.)
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Stinky
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Re: Late husband's life insurance from childhood

Post by Stinky »

KlingKlang wrote: Tue Jun 02, 2020 9:59 am The first thing that comes to mind is Gerber Life Insurance. They've been running TV ads for decades urging you to "protect and provide for the future of your child". I doubt that the majority of those that purchase it have any idea what it really is. As already mentioned, it's an asset that would be very easy to forget about.
Globe Life is another that comes to mind.

They flooded our mailbox with solicitations for several years after we had children.
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Jack FFR1846
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Re: Late husband's life insurance from childhood

Post by Jack FFR1846 »

Not surprising. DW and I have been married for 34 years and only a year ago, our FIL gave DW info about some insurance policy on her that's paid up and worth (he thinks) $1k. DW hasn't bothered to look into it. This is probably a relatively common income stream for insurance companies. Sell insurance, collect premiums, never pay anything as it's forgotten by those who bought it.
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Carson
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Re: Late husband's life insurance from childhood

Post by Carson »

Also not surprised, my brothers and I are 40-50 years old and our parents have life insurance on us still. They're small $ policies - I have no idea what they paid for them in the first place.
30-something personal finance enthusiast, just get getting started on this whole portfolio thing.
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BolderBoy
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Re: Late husband's life insurance from childhood

Post by BolderBoy »

My sympathies for your loss.

Policies like this were/are very commonly sold to the parents of young'uns. My mother's parents bought her such a whole life policy from The Guardian Life Insurance Company when she was 14 y/o and they, then my mother, dutifully paid the premiums ($15/year) thereafter. The face value of the policy was $1000 when purchased. Mom died at 92 and the policy paid out $7k.
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Silk McCue
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Re: Late husband's life insurance from childhood

Post by Silk McCue »

I bought my wife's 1/2 carat engagement ring 38 years ago using the cashed in $1000 insurance policy my parents bought when I was born. I think they bought it to cover burial costs in case I died as a child. When they knew of my plans to propose they suggested using the policy for the ring.

Cheers
aristotelian
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Re: Late husband's life insurance from childhood

Post by aristotelian »

A lot of people have the attitude "my kids are my retirement plan." If that is the case, taking out insurance on your kids makes sense. Sorry for your loss.
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Chip Munk
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Re: Late husband's life insurance from childhood

Post by Chip Munk »

Silk McCue wrote: Tue Jun 02, 2020 11:19 am I bought my wife's 1/2 carat engagement ring 38 years ago using the cashed in $1000 insurance policy my parents bought when I was born. I think they bought it to cover burial costs in case I died as a child. When they knew of my plans to propose they suggested using the policy for the ring.

Cheers
My parents had a small policy on me for that very reason -- to cover funeral expenses just in case. My parents cashed it in when I finished college. It was $500. Mom had the insurance company send the check to me, which I appreciated since I was just starting out and had student loans to pay. I also took the receipt of that check to mean "you're on your own now kid!"

OP: I'm sorry for your loss.
lazynovice
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Re: Late husband's life insurance from childhood

Post by lazynovice »

These small policies are either sold as burial policies or college savings vehicles. They are usually small and sold to those who are not especially financially astute.

My grandmother passed away in her 90s leaving behind several small burial policies she had purchased from as far back as her 20s. She subsequently pre-paid her burial expenses but kept all the paperwork for the old policies. My dad was half irritated and half entertained trying to collect on all of them after she passed. Probably amounted to $1,000 between all of them.
BruDude
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Re: Late husband's life insurance from childhood

Post by BruDude »

This isn't uncommon. Policies purchased on a child also often include a guaranteed future insurability option. Generally, these options will allow the insured to exercise up to 7-8x the face value until the child is age 21-26, usually in increments of 3 years. It can provide the advantage of guaranteed coverage for a child that develops a health problem that would prevent them from getting more life insurance in the future. The majority of the time they are simply used to cover burial expenses or to give to the child as a gift when they graduate high school/college/get married/etc.
bayview
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Re: Late husband's life insurance from childhood

Post by bayview »

Stinky wrote: Tue Jun 02, 2020 10:07 am
KlingKlang wrote: Tue Jun 02, 2020 9:59 am The first thing that comes to mind is Gerber Life Insurance. They've been running TV ads for decades urging you to "protect and provide for the future of your child". I doubt that the majority of those that purchase it have any idea what it really is. As already mentioned, it's an asset that would be very easy to forget about.
Globe Life is another that comes to mind.

They flooded our mailbox with solicitations for several years after we had children.
They are still mailing me, six addresses later. I’m 65, and my kids are in their mid- to upper-30’s. :annoyed

OP, I’m very sorry for the loss of your husband.
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TierArtz
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Re: Late husband's life insurance from childhood

Post by TierArtz »

Sorry for your loss.

Last year, I learned my parent's bought life insurance (likely burial insurance) on me when I was a child - almost 60 years ago. It had a cash value of about $4300, which had been earning enough interest to pay for its own premium for years. May dad signed it over to me. I cashed it out and received a 1099R to cover the taxable portion (roughly $4000). So, that $4,300 cost my parents about $300 over the years. I'm grateful for their "investment" and that I lived to learn it existed. I hope your in-laws put the policy proceeds to good use.
NotWhoYouThink
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Re: Late husband's life insurance from childhood

Post by NotWhoYouThink »

Mostly these policies are sold to the parents of very young children. FIL's parents took out a life insurance policy on him the day he enlisted in the Army in 1946. OK. They did sign it over to him eventually, and his kids filed the claim on it when he died.

Very common, not very good from an investment standpoint. Sold rather than bought, as they say.
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Ralph Furley
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Re: Late husband's life insurance from childhood

Post by Ralph Furley »

I'm sorry for your loss.

Like a lot of commenters, my parents purchased two small policies on me when I was a child. These are with Northwestern Mutual. My folks handed the policies over to me when I got out of college. I cashed one in to fund my Roth IRA one year. The other one I still have and continue to pay the small premium every year - perhaps just out of nostalgia.
mike_in_ny
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Re: Late husband's life insurance from childhood

Post by mike_in_ny »

Sorry for your loss.

My parents had taken one of these policies out on my when I was 2-3 months old, through
a company called SBLI (Savings Bank Life Insurance) and truthfully it just sort of snowball
in the background. They were getting annual dividend statements and at some point had
them transferred over to me. It was like $80/year, and the premium was paid from this
and the rest re-invested into the whole life policy. I think most people don't look at it
out of inertia. The death benefit was $1k.

It took me a little bit to figure out how to cash it in, and at the time I realized how much
better they would have been if they had just put that money into an index fund (if it had
existed) in the late 60s....

I wouldn't let this affect your relationship with them going forward. First, I'm 99%
certain that its a small amount of money. Second, you are both undoubtedly grieving the
untimely passing of a loved one.
investingdad
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Re: Late husband's life insurance from childhood

Post by investingdad »

I guess I've always been in the camp of never quite understanding the point of life insurance on a young child. My wife and I have term policies on ourselves that expire when our oldest turns 20. The idea being to provide our kids with a source of money if something happens to us.

But I remember seeing ads for life insurance for kids when growing up and then again being solicited when we had kids.

My impression is that it's common and may be sold to new parents under the guise of "doing the right thing" without really defining what that is.
BruDude
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Re: Late husband's life insurance from childhood

Post by BruDude »

investingdad wrote: Thu Jun 04, 2020 7:31 am
I guess I've always been in the camp of never quite understanding the point of life insurance on a young child.
My wife and I have term policies on ourselves that expire when our oldest turns 20. The idea being to provide our kids with a source of money if something happens to us.

But I remember seeing ads for life insurance for kids when growing up and then again being solicited when we had kids.

My impression is that it's common and may be sold to new parents under the guise of "doing the right thing" without really defining what that is.
Most people live paycheck to paycheck and would not be able to afford the funeral for a child, let alone being able to take time off work. A small life insurance policy solves that problem.
Jags4186
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Re: Late husband's life insurance from childhood

Post by Jags4186 »

As others have said, it’s a pretty common thing. I would guess its actually more common with lower income folks which sounds like your husband’s parents.

Not weird, and likely it was completely paid up years ago costing your in-laws nothing to keep the policy.
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