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Old 07-10-2016, 07:32 PM   #21
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I don't think you should keep it just for your DD's benefit, remember if you pass she will get SS dependent payments until she is 18 or out of high school, which should keep most of your original nest egg intact for college and such.

However keeping it in case you have a second family is a very valid reason. A bird in the hand and all that....if you've had a change in your health status, you won't be able to replace if at a later date, at least not for the same rate...if you are still in good health you might price a policy with a lower face value...
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Old 07-10-2016, 07:36 PM   #22
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Originally Posted by dvalley View Post
Thanks redduck, I appreciate the clarification. I didn't consider providing for her beyond the point when she's an adult. Of course I would help my only child if she needed help regardless of her age as any other parent would but if I didn't die I don't think I'd be able to provide a whole lot of financial support without putting my FIRE at risk. If I did die, well then she'd still have a sizable inheritance which is my FIRE pool of money. However, it does make sense for me to keep it because it's cheap insurance- literally
That's a good dad!
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Old 07-11-2016, 12:45 PM   #23
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A little bit more on this life insurance thing:

It's kind of a philosophy/opinion about taking care of a family member. Other people obviously have different ideas and thoughts on the subject.

The reason I feel so strongly about my philosophy: my father died when I was young: no life insurance. When the time came, I simply couldn't afford to go to the college of my choice (out-of-state school). I stayed in-state for my undergraduate degree. That worked out okay. I mean, come on, that's where met my wife, eventually many years later to be my ex-wife.

The lack of life insurance situation arose when it came time to go to graduate school. In this case, I wanted to stay in town to go to school. It would have been especially good for internships, making contacts, becoming known. But, the in-town school was way, way, way too expensive even with a partial scholarship, small grants and huge loans. Because there was no $750K life insurance money, I had to leave the state for my graduate work (where I got a full scholarship). But, the price to be paid was that I was not able to get the internships and make the contacts that others in my field made as they stayed in town. The other thing I learned was that alumni take care of their own--that's just how it was back then (maybe still is). Coming back home after graduate school, I found I was years behind my colleagues with regard to becoming established in my chosen field. So, not having had the advantage of a good-sized life insurance policy had ramifications years and years later.

Of course, YDMMV (Your Daughter's Mileage May Vary)
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Old 07-12-2016, 08:48 PM   #24
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I'd definitely keep the policy. And create a simple trust that would accept the funds and dictate the terms for disbursement.
If your situation changes, you can leave the policy as-is and name other assets in your will for your potential new spouse.
All of our beneficiaries (niece and nephews) are minors, and we have verbiage in our wills to create two trusts that would provide for them at the discretion of the trustee, my BIL.
What you don't want is for her to get a ton of cash at 18 or 21.
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Old 07-13-2016, 01:53 AM   #25
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The first thing I would do is remove the EX as beneficiary and make my child the beneficiary.

Oh absolutely. Like yesterday.


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Old 07-13-2016, 10:39 AM   #26
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Thanks all. Working on the beneficiary thing now...

Sarah, you're saying I don't actually have to create a trust I can just have the direction to create a trust in my will? That simplifies things for the time being as I'm finding it difficult to do anything else (like live my life) outside of work these days.
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Old 07-13-2016, 01:49 PM   #27
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Yes, that's what our attorney did for us, is create the trust as part of the will (testamentary trust). A lawyer could probably answer the questions a bit better, as my estate education was about 6 months of classes, mostly dealing with more complicated structures than my own situation.
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Old 07-15-2016, 10:54 AM   #28
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I'd say Keep It. $750k of life insurance for $600 a year sounds like a super deal to me. I just spent that much (yearly) to get a $20k policy--but I'm 66.
You never said how long the policy is good for.
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Old 07-15-2016, 11:42 AM   #29
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The first thing I would do is remove the EX as beneficiary ....
Simply because you have no guarantee your ex would spend a penny on the DD.

You would think.. a parent would be kind, generous, loving, etc, but I can tell you this is not always the case.

Somehow set up a trust for DD and know for sure she gets the $$$$.
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Old 07-15-2016, 12:04 PM   #30
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Not sure if it is the same in every state but when my sister passed away and her son was a minor, the state gave the money to her ex anyway supposedly as a custodian. Most of the money got squandered before he turned 18.

I think you have enough assets to cover you kid's cost of living plus college so I would cancel the policy.
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Old 07-15-2016, 01:16 PM   #31
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Not sure if it is the same in every state but when my sister passed away and her son was a minor, the state gave the money to her ex anyway supposedly as a custodian. Most of the money got squandered before he turned 18.

I think you have enough assets to cover you kid's cost of living plus college so I would cancel the policy.
Unless unfit, the remaining parent would be the guardian anyway. As I mentioned before, my DS named me on her life insurance policy as it was the only way she felt confident of bypassing her ex completely...I am trustworthy and she knew for sure I would be more capable then her ex.
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Old 07-16-2016, 04:03 PM   #32
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As an "ex" of a deceased father of a preteen child, I would ask you to in some way provide for your child's care, not just her expenses.
If your ex benefits as well that may not be bad depending on how responsible she is. Your child may need more care and or counseling all of which can be expensive. I had access to FMLA but that was not paid and quite frankly I was discouraged from taking it.
A couple of years to recover without having to work would have benefited my child greatly. Perhaps provide income in case of need? Again, if she is responsible and not remarried to a bad person.
It all depends on the situation of course and your entire family.

Great price on insurance anyway I'd never cancel.


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