Good idea to sell car so I can pay husband's life insurance payments?

WheatenLover

WheatenLover

Senior Member
Location
Georgia
My husband, from whom I am separated, has $200,000 life insurance. It costs $1066 per month (doubled from the usual because he smokes). I've had this policy on him since 2011, and it increases in cost as he ages. He is going to be 73 in June, and is in poor health.

Another twist to this story is that my son inherited money from my mother, which he agreed would be my money. He agreed to that. The purpose was to enable me to buy a house in another state, and to be able to support myself. My husband is terribly bad with handling money.

My son asked for the password to the bank account, which I freely gave him because I trusted him 100%. No reason not to. He changed the password on the account and he and his brothers moved to California. My son paid some of my bills during this time, if agreed they should be paid (utilities) and for other things I needed if I got his permission first.

Son #1 managed to manipulate my son into giving him most of the money, so that Son #1 would not become homeless and commit suicide. There is only $18,000 left out of the original $200K. Thus, Son #1 wants to let the life insurance lapse unless I sell the car.

The proceeds from the sale will pay for the life insurance for two years. i paid $30K for the car and it has only 14,000 miles on it and is in perfect, well-maintained, condition. The most I can get for it is $27K. I have another car, a 2004 Honda CRV that still runs fine. We could use that car. It is unofficially my daughter's car, and she agreed all of us could use it. She's been using my car for the last 1.5 years, about 95% of the time, and she iives with me.

When she moves out (probably in a year), she will take her car with her. In my town there is scanty bus service, no Uber, no taxis.

Also, I am not wishing my husband to die. I am very supportive of him, not that he takes my advice, and we are still friends. In fact, I am his onlly friend. My concern is financial security, since I don't have it any more.

Is it a good idea to sell the car? I don't want to, but it seems silly to forfeit life insurance when there is another car available. My concern is that I don't want to throw good money after bad, I don't want to sell my safe, reliable car, and I am worried about how to handle transportation when my daughter moves out (when she gets her master's degree next year.

Thanks for your help.
 

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I don't know much about life insurance but this sounds like the type that you cannot get a cash payout early?
It is a hard situation, if you sell the car and use the proceeds to keep paying for the insurance, what happens when the money runs out in a couple years? Is your ex's poor health so bad that it is unlikely he will live that long?

What will happen if he lives longer, is there a limit to how long the insurance will be effective?

It sounds like a very hard decision, if you sell car and keep up the insurance and he dies, then it would be okay you could buy a new car and you would have more financial security. But if you sell the car and he doesn't die then you have no car, no more money to keep up the insurance, and that sounds very precarious. If you don't sell the car and let the insurance lapse, is the 18,000 for absolutely sure going to be allowed for your use, or since your mom left the money to your son might he decide he needs it even though he gave it to you? I'm a little unclear on who really owns the existing money. And if you let the insurance lapse and then your ex dies within two years, will you be upset with yourself for not selling the car?

I'm sorry you are in this situation, it sounds risky all the way around.
 

First off, I would formally write your kids out of your will. They are obviously not responsible, nor trustworthy. This only requires an additional line saying that you intentionally exclude them (by name) - and don't tell them! What does your husband's will say?

I would sell the car for $27,000. Otherwise, I really feel you will have nothing. Do you really trust your kids to keep up the insurance payments if they aren't listed as beneficiaries? I get the feeling they would only do so in hopes of collecting profits when you pass.

Who are the named beneficiaries on the life policy? If it has any cash value, I'm assuming it isn't very much since it isn't that old. It really depends on what type of policy it is. In Ohio, the policy that was written on me with ex as beneficiary was "automatically" awarded to me. I'm not sure about PA. The same with the ex's policy. I'm fearful of the outcome if these assets become part of a divorce settlement. I'd stick out the marriage if at all possible.

I hate to say this, but you really need a lawyer who is skilled at elder financial planning.
 
If cashing in the policy isn't an option, try calling the insurance company to negotiate for a lower premium. There may be coverage on there that you don't need. Be up-front and tell them the premium is causing hardship. Most insurance companies are willing to work this kind of thing out with you, especially if it lowers the payout amount (be aware of that outcome, btw).
 
How will you continue paying the life insurance premiums after the money from the sale of the car is gone?

Can you continue to live indefinitely without the proceeds from your husband's life insurance?

Will the proceeds of the life insurance policy solve your financial problems, prolong the inevitable, create new problems, etc..?

A 73-year-old man's life expectancy is an additional 12.43 years.

It's an interesting and difficult question to answer.

I would feel better about myself if I was able to use the money from the sale of the car to create a new sustainable living situation for myself without depending on the life insurance policy.

Good luck with your decision.

"No regrets, just lessons. No worries, just acceptance. No expectations, just gratitude. Life is too short."
 
HoneyNut said:
I don't know much about life insurance but this sounds like the type that you cannot get a cash payout early?
It is a hard situation, if you sell the car and use the proceeds to keep paying for the insurance, what happens when the money runs out in a couple years? Is your ex's poor health so bad that it is unlikely he will live that long?

What will happen if he lives longer, is there a limit to how long the insurance will be effective?

It sounds like a very hard decision, if you sell car and keep up the insurance and he dies, then it would be okay you could buy a new car and you would have more financial security. But if you sell the car and he doesn't die then you have no car, no more money to keep up the insurance, and that sounds very precarious. If you don't sell the car and let the insurance lapse, is the 18,000 for absolutely sure going to be allowed for your use, or since your mom left the money to your son might he decide he needs it even though he gave it to you? I'm a little unclear on who really owns the existing money. And if you let the insurance lapse and then your ex dies within two years, will you be upset with yourself for not selling the car?

I'm sorry you are in this situation, it sounds risky all the way around.
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It is risky. My son has the $18K that is left, and he decides how to spend it. Currently, my daughter is mad at him because he won't let her add ice-cream to the grocery list.

He paid one month of the life insurance today, which gives him another month to think about it. The situation does not seem to have a good answer ... just risky, no matter what. There are too many unknowns.
 
Em in Ohio said:
First off, I would formally write your kids out of your will. They are obviously not responsible, nor trustworthy. This only requires an additional line saying that you intentionally exclude them (by name) - and don't tell them! What does your husband's will say?

I would sell the car for $27,000. Otherwise, I really feel you will have nothing. Do you really trust your kids to keep up the insurance payments if they aren't listed as beneficiaries? I get the feeling they would only do so in hopes of collecting profits when you pass.

Who are the named beneficiaries on the life policy? If it has any cash value, I'm assuming it isn't very much since it isn't that old. It really depends on what type of policy it is. In Ohio, the policy that was written on me with ex as beneficiary was "automatically" awarded to me. I'm not sure about PA. The same with the ex's policy. I'm fearful of the outcome if these assets become part of a divorce settlement. I'd stick out the marriage if at all possible.

I hate to say this, but you really need a lawyer who is skilled at elder financial planning.
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I am the primary beneficiary, and if I die before my husband does, the insurance goes to the kids equally. My husband is willing to change the beneficiaries to whatever I want.

It is a term policy.

Three of my kids don't want to be beneficiaries. My son only wants to pay the life insurance if he gets half the money when my husband dies. It is for taking the risk of paying for the insurance. I pointed out that he will be paying for it with my money. That did not change his mind.

My husband cannot afford the payments, so I took them over before my son took the money.

If I had anything to leave my kids, I would think hard about how many people would feel that their parents didn't love them if they were left nothing. I do love my kids, and I wouldn't want them to believe that I did not. But that is not an issue at this point.
 
Aunt Bea said:
I would feel better about myself if I was able to use the money from the sale of the car to create a new sustainable living situation for myself without depending on the life insurance policy.

Good luck with your decision.

"No regrets, just lessons. No worries, just acceptance. No expectations, just gratitude. Life is too short."
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Your questions are all ones I have asked myself. I do think selling the car will give us a cushion, and may be a better plan than using the proceeds to pay for the life insurance. But then I think, what if my husband died fairly soon? And what if he didn't? I hate focusing on my husband's death as a solution for me. I don't have enough information to make the right decision.

My husband is pretty sick, and I don't know how long he will live. All of that is not within my control, and it sure would be valuable information to have, although impossible to come by. My son has a "gut feeling" that my husband will live for a long time. Those gut feelings probably arose because he doesn't want his father to die, so I told him that his gut feelings are not an element of the decision-making process. Mostly because if he's wrong, we won't get the insurance proceeds since he doesn't want to pay for the insurance. And if he's right, we just lost a lot of money we can ill afford to lose.

Besides which, it really shocked me when my mother was close to death. I never thought she would die; it literally didn't cross my mind. And then she did. My son's gut feeling about me is that I will live into my 80s, at least. My current health doesn't give me that impression.

It would solve my financial problems to have even half the insurance proceeds. This is because I would get more social security income as a surviving spouse, and because I would have money to invest. I am pretty good at investing and love doing it, even though I do not risk money I will need.

The only way I have thought of to make money is to write books. That is not a winner of a solution. But I am going to do it anyway. I used to think writers just had words flow from their fingertips. Now that I've looked into it, I know it is actually hard work, but I want to give it a try.

My son will want to move in a year or so, and he wants me to go with him, to live with him, and he will make sure I will be supported by providing me with the necessities of life. He agreed to go where I was planning to move before Covid and cancer and him taking the money. But he'd rather that we move to California. I don't want to move to a place where I don't know anyone. I have friends and family in Georgia.
 
WheatenLover said:
Your questions are all ones I have asked myself. I do think selling the car will give us a cushion, and may be a better plan than using the proceeds to pay for the life insurance. But then I think, what if my husband died fairly soon? And what if he didn't? I hate focusing on my husband's death as a solution for me. I don't have enough information to make the right decision.

My husband is pretty sick, and I don't know how long he will live. All of that is not within my control, and it sure would be valuable information to have, although impossible to come by. My son has a "gut feeling" that my husband will live for a long time. Those gut feelings probably arose because he doesn't want his father to die, so I told him that his gut feelings are not an element of the decision-making process. Mostly because if he's wrong, we won't get the insurance proceeds since he doesn't want to pay for the insurance. And if he's right, we just lost a lot of money we can ill afford to lose.

Besides which, it really shocked me when my mother was close to death. I never thought she would die; it literally didn't cross my mind. And then she did. My son's gut feeling about me is that I will live into my 80s, at least. My current health doesn't give me that impression.

It would solve my financial problems to have even half the insurance proceeds. This is because I would get more social security income as a surviving spouse, and because I would have money to invest. I am pretty good at investing and love doing it, even though I do not risk money I will need.

The only way I have thought of to make money is to write books. That is not a winner of a solution. But I am going to do it anyway. I used to think writers just had words flow from their fingertips. Now that I've looked into it, I know it is actually hard work, but I want to give it a try.

My son will want to move in a year or so, and he wants me to go with him, to live with him, and he will make sure I will be supported by providing me with the necessities of life. He agreed to go where I was planning to move before Covid and cancer and him taking the money. But he'd rather that we move to California. I don't want to move to a place where I don't know anyone. I have friends and family in Georgia.
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The cost of a big move to either place will devastate the remaining funds. California's cost of living is outrageous. Unless your son has a really good job waiting (with a contract) and gets better at handling money, I don't see these as viable for you. I really hope you seek skilled professional legal/financial help very soon and do hope it works out for you. By the way, gifted money should not be the criteria that proves love, in my opinion. Best of luck.
 
Sounds to me like a real mess. I don't have any insurance on me so I'm not expert on this. However, the advice I can give is this:
1. The common advice is never to give your password to anyone; no matter how much you trust them.
2. I know of 2 cases where the son proved to be a "good for nothing" druggie. The parents just wrote them out of their will. They felt he would use the money just to keep feeding his drug addiction. This is good but make sure that you get a good will from a good lawyer. None of them "at home" wills written in pen by you. In Canada, wills can be challenged by upset kids. Then the challenge can drag on for years in the courts. All good news for the lawyers but not good news for those contesting the will.
 
WheatenLover said:
The insurance is term, not whole life.
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For a term policy the monthly amount seems really high.

As I understand term life insurance. Term is supposed to cost less than whole life because it has no buy back & if your husband outlives the term you get nothing. I don't want to appear as being nosey but how many more years are left to pay on this policy?

I feel really sorry for you to be between a rock & a hard place at this time in your life. Hopefully you find a solution.
 
Knight said:
For a term policy the monthly amount seems really high.

As I understand term life insurance. Term is supposed to cost less than whole life because it has no buy back & if your husband outlives the term you get nothing. I don't want to appear as being nosey but how many more years are left to pay on this policy?

I feel really sorry for you to be between a rock & a hard place at this time in your life. Hopefully you find a solution.
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Until my husband is 79, and then it goes away. Life insurance payouts can be canceled if someone lies on the form ... such as lying about smoking. So I told the truth, knowing the policy amount would double. When I bought it, the monthly payment was $400 instead of $200 because of that. It goes up every time he hits a certain age. I bought it less than a month before he got sick and started having strokes.
 
Packerjohn said:
Sounds to me like a real mess. I don't have any insurance on me so I'm not expert on this. However, the advice I can give is this:
1. The common advice is never to give your password to anyone; no matter how much you trust them.
2. I know of 2 cases where the son proved to be a "good for nothing" druggie. The parents just wrote them out of their will. They felt he would use the money just to keep feeding his drug addiction. This is good but make sure that you get a good will from a good lawyer. None of them "at home" wills written in pen by you. In Canada, wills can be challenged by upset kids. Then the challenge can drag on for years in the courts. All good news for the lawyers but not good news for those contesting the will.
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A will is the least of my concerns as I don't have anything valuable. The thing is that everyone who knows him would have trusted this son, 100%. It was a total shock when it happened.
 
Em in Ohio said:
By the way, gifted money should not be the criteria that proves love, in my opinion. Best of luck.
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He's been living in California, and just came back about a month ago. That's why he wants to move there. He is happy to move to Georgia instead, though.

There are plenty of people who are devastated when their parents leave them nothing or less than the other kids. It's not the money, it's that they feel left out and/or unloved. There are others, like my brother, who has plenty and who insisted that he not be in my mom's will because he is much more prosperous than his sisters are. I wouldn't want chance my kids thinking I didn't love them.
 
WheatenLover said:
Until my husband is 79, and then it goes away. Life insurance payouts can be canceled if someone lies on the form ... such as lying about smoking. So I told the truth, knowing the policy amount would double. When I bought it, the monthly payment was $400 instead of $200 because of that. It goes up every time he hits a certain age. I bought it less than a month before he got sick and started having strokes.
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I hope this doesn't sound uncaring but have you checked with his doctor to get an idea of how long he might still have in his condition.

My father was ill with multiple issues, his doctor told me he had about two weeks to live. I had to decide if he would stay in the hospital or go to a nursing home. In the hospital he would be alone most of the time, in the nursing home he would get the same care but have others he could talk to. I thought nursing home to be the kindest, it was, he died two weeks to the day from when I made the decision.

His life insurance was enough to pay for the care & burial expenses.
 
@WheatenLover there are companies that will buy a term policy, but they buy them for far less than the payout at death, probably 50% or less. If the policy has a conversion (to whole life) option, it will be worth more than if it doesn't.

Ask Mr. Google, and do your due diligence before making a deal!

If this is a possibility for you, keep the money for yourself and don't let anybody talk you out of it no matter what. As a matter of fact, if it works out for you, don't let anybody know that you have any money whatsoever!
 
If this is an account that you started how can your son legally take over the account? It should be you that are able to control the account, your signature on the account. I say contact the insurance company and report this fraud the son has committed and change the password, so you control the account. Perhaps the insurance company will file charges against the son for fraud.
 
Knight said:
I hope this doesn't sound uncaring but have you checked with his doctor to get an idea of how long he might still have in his condition.
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If he doesn’t pass away in X amount of time, do you get anything?
 

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