Klenk Law

Should I pay the premium on a life insurance policy naming me as beneficiary?

Posted on Fri Jun 5, 2015, on Life Insurance

From our “Ask a Question” Mailbag: Paying Life Insurance Under Power of Attorney as a Beneficiary

Most Recently Updated July 14, 2018.

“My mother is incapacitated and living in an assisted living facility in Atlantic County, New Jersey. She appointed my brother Agent under her Power of Attorney. My mother has a life insurance policy that names me as beneficiary. My brother refuses to make the payment, so the policy will soon lapse. Can I make the payment?”

Paying Life Insurance Under Power of Attorney as a Beneficiary

Paying Life Insurance Under Power of Attorney as a Beneficiary

The insurance company does not care who sends the check. Therefore, you certainly can make the payment.

The real question you should be asking here is: Should you make the payment?

Term Policy

If the policy is a term policy, you should consider when the policy lapses. If the term policy only has one or two years remaining and your mother is in good health despite being incapacitated, then your payments might be lost, as the policy may lapse before her death.

Permanent Insurance

If the policy is some type of permanent insurance, and if your mother will some day move into a facility and apply for Medicaid, the state may require that she take the cash value of the policy out to pay her bills. If so, the cash value might be lost. There are many options available in this situation, and many potential outcomes. Our attorneys have dealt with the countless permutations of this situation.

This is the perfect example of a scenario where there’s no cookie cutter solution, and a free consultation from an experienced estate planning attorney can help you run some numbers and think about the outcomes that would make the most sense for your family.

More Planning Questions?

Questions about agency under a power of attorney is only a piece of the Estate Planning process. By all means, if you want to learn more, please read my more detailed article, Estate Planning Everything You Need to Know.

In Conclusion: Paying Life Insurance Under Power of Attorney as a Beneficiary

I hope that this article was helpful in explaining paying life insurance as an agent under a POA. Further, I included links to even more detailed information on my website so you can learn more. Therefore, please contact me and let me know how I did. Certainly, your comments and questions are welcome!

Let our Estate Planning lawyers help walk you through what can be a confusing process. To begin with, call to speak to one of our experienced estate planning lawyers.  By all means, our lawyers are ready to answer your questions. In fact, feel free to contact our office for a free consultation. Ultimately our goal is to make the process as painless as possible!

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Tags:

Atlantic County, Estate Planning, Estate Planning Attorney, Estate Planning Lawyer, Fiduciary Duty, Life Insurance, New Jersey, Power of Attorney

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