My dad has Medicare and another health insurance. My aunt has a life insurance policy for him (not in his name) and she will not let him put it in his name because she states that if he ends up in a nursing home they will take it away or take it over. Is this true??
I have POA over everything concerning him.
if he goes in to a nursing home and cannot afford to self-pay, he will have to go on Medicaid and depending what type of life insurance policy it is, it would affect his eligibility. Medicaid does not take life insurance policies. If it’s a term life insurance policy, it doesn’t count as an asset. If it is whole life insurance, it would have to be cashed in I believe. So in a way your aunt is right. But again, if he’s not the insured person, how can she collect on the policy when he dies?
My father wants it back in his name and put me back on it has the bene. I am also The POA on everything concerning him. But she is refusing to change it. FYI she is working for the company she has the policy through. I believe she is abusing her previlages when working for the company.
What I understand is if Dad has an insurance policy in his name that has cash value, Medicaid will ask to have it cashed in. The money can be used to prepay for a funeral which is what I did. If the policy is owned by an employer or former employer Medicaid does not count it.
The problem will come if Dad is a beneficiary and Aunt dies before him. If he is on Medicaid for his care, the money he would receive would need to go for his care. Medicaid would stop till the money was spent down then he would have to reapply.
If he ever receives money from this policy and he is not on Medicaid, the money should be put aside and only used for him just in case he ever needs Medicaid. None of it should be gifted.
I have POA over everything concerning him and he wants his policy back in his name with me as the bene
she is abusing her postion. and nothing can be done.
https://www.quotacy.com/can-i-buy-life-insurance-on-someone-else/
Can I Buy Life Insurance on Someone Else?
by Natasha Cornelius | Mar 7, 2018 | InsuranceLife | 217 comments
You usually purchase life insurance on yourself to financially protect your loved ones in the event of your death. It’s an affordable way to secure your family’s financial future because the life insurance cost is quite low.
It is also affordable to buy life insurance on someone else, such as a spouse, child, or even business partner. Buying life insurance on someone else is possible as long as you have consent and insurable interest.
Life Insurance and Insurable Interest:
Insurable interest means that you would be adversely affected financially if the person who is insured died.
In other words, you cannot purchase life insurance on the stranger you met at the grocery store yesterday. That person has no bearing on your finances. If that person died, you would not be affected financially.
The reasoning behind requiring insurable interest is so that the death of the insured person does not create personal gain for the policyholder. Allowing someone to be able to own life insurance on just about anyone could possibly lead to intentional harm.
However, being related to someone does not automatically mean you can buy life insurance on them. To buy life insurance on anyone, even including your very own family members, you would still need to prove that their death would negatively impact your finances.
Similar to how you can’t get life insurance on someone just because you are related to them, there are also occasions in which you can purchase life insurance on someone if you are not related. There are many business relationships that can be financially protected with a life insurance policy. One example is key person life insurance.
Maybe this is why the aunt has an insurance policy for her dad. Just a thought.
And then all of a sudden she wanted to own my dads policy and refuses to let him change it back to his name. Which he had for many years before her changing it. And wants me as the ben since i am POA of everything else. But she refues him
This makes sense. So like business partners getting insurance on each other. I had a woman at work who insured her ex because they had a daughter. If he died, then she would have money for child support.
So Shiela, it seems there needs to be a reason why Aunt's name is on a policy covering Dad. Does he get a cheaper rate doing it this way because she is an employee. Who pays the premium? And why do you feel that Dad may never need Medicaid. Medicare and health insurances do not pay for LTC.
I think your Dad needs an insurance rep to visit him. Or, if there is a local office, make an appt with someone other than Aunt. This just all sounds fishy to me. And if Gma's policy had more than one beneficiary then those that didn't get should sue the sister.
As suggested, u may need a lawyer but I first would try the company holding the policy.