Dear Penny: Was My Cousin Allowed to Buy Life Insurance on My Mom?

Dear Penny,

My mom died after a number of years with Alzheimer’s within the Philippines. While she was residing in Maryland, a cousin took an insurance coverage coverage on her. She agreed realizing that she would solely pay $50 a month and the remaining can be shouldered by her niece. 

Now my cousin is asking for 4 demise certificates and desires me to fill out kinds as a result of, in line with her, I'm the beneficiary. If she is the proprietor of the coverage, what does it must do with me? I requested for a duplicate of the coverage as a result of I do not know what she is making an attempt to do. Please assist.

-Confused Daughter

Dear Confused,

Trust your intestine. Don’t give your cousin your mom’s demise certificates or any private info she asks for.

There are loads of issues that sound sketchy right here. The greatest purple flag is that your cousin owned a life insurance coverage coverage in your mother. You can’t simply take out an insurance coverage coverage on anybody. Just think about how rife for abuse the system could be if we might all make bets on each other’s lives.

To personal a life insurance coverage coverage on another person, it is advisable have an insurable curiosity of their lives, which means you’d endure a monetary loss within the occasion of their demise. It’s sometimes assumed that you've an insurable curiosity within the lifetime of your partner or your baby. You may even have an insurable curiosity within the lifetime of your ex-spouse in the event that they’ve been ordered to pay you alimony or baby assist. But it’s unlikely that a niece would have an insurable curiosity within the lifetime of her aunt, until there have been uncommon circumstances — like they have been enterprise companions or your cousin had co-signed a mortgage on your mother.

You additionally want the individual’s consent to take out insurance coverage on their life. I've to surprise: Did your mom absolutely perceive what she was signing? Or when you solely not too long ago found this coverage, is it doable that your cousin might have cast her signature? It’s additionally odd that your mom was making partial funds in case your cousin owned the coverage.

It’s fairly implausible that your cousin would have purchased life insurance coverage on your mother out of the goodness of her coronary heart. A extra lifelike clarification could be that she plans to pocket most, if not all, of the proceeds.

You can proceed to press your cousin for a duplicate of the coverage. But don’t be stunned when you’re met with a flurry of excuses and convoluted explanations. Even in case your cousin does give you the doc, I wouldn’t assume it’s professional. Contact the insurance coverage firm on to confirm the coverage. You can present the demise certificates to the insurer immediately if it’s legit. The firm can ship you any needed kinds.

If your cousin gained’t cooperate, you'll be able to search the National Association of Insurance Commissioners on-line life insurance coverage coverage locator. The group will ask collaborating firms to seek for insurance policies in your mom’s title. If they find a coverage and also you’re the beneficiary, they’ll give you the main points. Your cousin doesn’t should be concerned. Even when you’re not a beneficiary, you’d in all probability be licensed to obtain this info as your mom’s subsequent of kin.

If you imagine your cousin had nefarious intentions, take into account contacting your state insurance coverage commissioner. Some individuals are hesitant to report members of the family to authorities. But when you suspect your cousin scammed your mom, she might simply do the identical to others. Elderly individuals are particularly susceptible to being conned by folks they belief, like members of the family. At the very least, you need to warn different members of the family when you suppose that’s what occurred.

Your cousin in all probability acquired figuring out details about your mom, like her Social Security quantity, when she obtained the coverage. Unfortunately, deceased individuals are liable to having fraudulent accounts opened of their names. A wise transfer could be to contact every of the three credit score bureaus to allow them to know that your mom has died.

I’m sorry that you need to take care of all this on high of the lack of your mom. But you could have each proper to be suspicious right here. Don’t let anybody, particularly your cousin, inform you in any other case.

Robin Hartilll is an authorized monetary planner and a senior author at The Penny Hoarder. Send your difficult cash inquiries to [email protected].

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