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tedd's avatar

Can I do this with a life insurance policy on myself?

Asked by tedd (14078points) April 19th, 2011
5 responses
“Great Question” (1points)

I currently have a life insurance policy on myself for around $200,000. Its payable to my mother, or her next of kin should she be dead as well. Its enough to pay off all of my debts, cover a funeral, and have a little bit left over probably.

I have been contemplating upping the policy significantly, to give my mother enough to pay off her debts as well as leaving her some money (to help offset the death of a child and all), and/or to help my father pay of his debts/retire on time (parents are divorced).

Now I’m fairly certain I’ll have no problem upping my policy to $500,000 or a million and make it payable to my mother or next of kin as it is now. My question though is this. I have a lot of friends, co-workers, etc… who I know could use some money. If I were magically a millionaire now I would be the type of guy to give away 10 thousand here or a “loan” here to a close friend I trusted that I knew needed the money. Obviously I’m not in a position to do that…..... but, I can easily afford a life insurance policy on myself paying out a million dollars or more (given my age, health, income, etc, it would cost around less than $10 a month for the next few years).

Could I make up a will for myself, and in it specify how I want my life insurance policy to be split up.. including numerous close friends, co-workers, schools, etc, as beneficiaries of set amounts of the money?

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marinelife's avatar

Yes, you could.

john65pennington's avatar

You could, BUT, you may lose track or become unfriendly to some of your friends. A change in the beneficaries of your will, can be time-consuming and cosly.

Why not just up your life insurance and keep your mother as the main beneficary??

You could leave instructions with your mother, that should you pass before her, that your life benefits are to be shared equally with x number of dollars to your friends.

Keep the life insurance proceeds in your family, if possible.

wundayatta's avatar

Remember, if you commit suicide, nobody gets anything.

tedd's avatar

@wundayatta well aware

YARNLADY's avatar

I think your insurance agent could probably help you with this.

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