Can a parent have life insurance on their adult child?

Question

My husband is having some medical problems recently that the doctors can't determine what is wrong with him. We have discussed what would happen if he were to find out he is terminally ill. He has a $350,000 life insurance policy through work and I am the beneficiary. Now to my question, he has told me that his mom has a life insurance policy on him for $10,000 that she purchased when he was a child. I thought those type policies ended at the age of 21 unless the child decided to keep the policy. My husband is 36.

To make a long story short, his mother isn't too concerned about him getting better. She seems to be more concerned about if he were to die that she would get some money. I've always known her to be a greedy woman, but this is taking it too far. It seems like over the past 2 years everything has been about money with her. It's just greed, greed, greed. If something were to happen to him, she is the last person who would honor his wishes.

Answer 1

Compared to $350k, $10k is a mere drop in the bucket.  I think you should just let it go.

But if your husband wants to do something about this, he can  contact the insurer in writing and state that his mother has NO insurable interest on his life; if his mother is the beneficiary, he can then ask to contest this.  

Another option:  depending on the wording of the policy, he MAY have become the policyowner when he turned 18, which entitles him to change the beneficiary to anyone he wants.

Answer 2

Yes, a parent can own life insurance on an adult child.  

Sorry for your situation.

Answer 3

Why are you so worried about her $10K policy.  Sounds like you have more important concerns.

Answer 4

She had an insurable interest in him at the time the policy was written; and as long as she has paid the premiums the policy is still in force, I'd imagine, so she could collect, like it or not.

Answer 5

You can take out an insurance policy on anyone that you have an insurable interest in. they dont have to be a minor. It can be any family member or like a business partner doesn't matter of age.

His 350K policy will be a different policy than her 10K policy. The 10K wont come out of the 350K, it will be paid to her by whatever company she signed her own policy with so it shouldn't be a big deal.

Answer 6

an adult can take out a policy on their child.  if she is listed as the policy owner, she has all rights to the policy and can make changes - including who gets the proceeds.  if you have a copy of the policy, then review that to see who is listed.   otherwise, contact the insurance company.   while they are not able to tell you who the owner is, they should be able to verify if whomever is calling is not the owner.