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

December 15, 2008 9:14 AM

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.

posted by helios410 to Work & Money (5 answers total)

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.
posted by qwip at 9:21 AM on December 15, 2008

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.
posted by gudrun at 10:20 AM on December 15, 2008

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.
posted by Twinedog at 10:25 AM on December 15, 2008

Response by poster: 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.
posted by helios410 at 2:14 PM on December 15, 2008

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.
posted by JackFlash at 2:38 PM on December 15, 2008