Comments on: What life insurance coverage do I sign my mother up for?

Question: What life insurance coverage do I sign my mother up for?

helios410 — Mon, 15 Dec 2008 09:14:41 -0800

Life Insurance Filter: I am looking to find coverage for my 55 y/o mother living in NJ. What is the best way to do this?

Through some preliminary research, I am looking for long-term, renewable coverage. Should I go through a local provider? How do I find out if I am enrolling her in a trustworthy program that is worth the monthly amount?

Any other suggestions/information is welcome.

Thanks.

By: qwip

qwip — Mon, 15 Dec 2008 09:21:11 -0800

Life insurance is typically used to cover lost income for survivors. It may be helpful to understand who she is currently covering financially and when they will be independent of her income (for example, adult children no longer need to be covered by life insurance of a parent). Are there dependants who need long term care? Children in college who rely on her income for tuition? This info can be useful in determining an appropriate life insurance product.

By: gudrun

gudrun — Mon, 15 Dec 2008 10:20:10 -0800

She's over 50, so you might look into what the AARP has in the way of insurance. You don't have to be retired to join AARP, just over 50. AARP also has a life insurance calculator.

By: Twinedog

Twinedog — Mon, 15 Dec 2008 10:25:59 -0800

FYI regular life insurance policies are counted in the estate for estate tax purposes. You might consider setting up an irrevocable life insurance trust if you want to get the death benefit tax free. Totally depends on your mom's financial situation and whether the estate tax would even be an issue.

By: helios410

helios410 — Mon, 15 Dec 2008 14:14:41 -0800

My mom has three kids (including me), but we are all adults now and are not considered dependents.

I will look into AARP. Thanks Gudrun.

By: JackFlash

JackFlash — Mon, 15 Dec 2008 14:38:13 -0800

My mom has three kids (including me), but we are all adults now and are not considered dependents.

That brings up the question of why she wants life insurance. What is the purpose? Unless she has a very large estate and property or a business that she wants to pass on tax free, I don't see the point. She would be better off taking the money she would otherwise pay for premiums and invest it for her heirs.

If you still think she needs life insurance, I would recommend that she select a broker who is a Chartered Life Underwriter (CLU). This certification is no guarantee that you have a good agent but at least he/she has enough training to pass some rigorous exams.