AboutMichael Feinberg, ChFC Expertise I am the Executive Director of Synergy Financial Services, concentrating in
life insurance, long term care insurance, and long-term and tax-advantaged
investing. I am licensed for Life, Health, and Securities. I am always happy to answer any questions you may have on any of these
topics.
Question My parents took out a life insurance policy on my sister in the 60's just after she was born. My father kept the policy active, even though they were estranged for many years. I'm not sure how it works, but I think he continued to fund the policy over the years...? She died a few months ago, and now he has a bunch of money he wants to donate, rather than pass it on to her family. I can't imagine how this money would go to him rather than her estate to care for her children. Can you tell me if we have any chance of getting this money to her kids, or direct me where to find someone who could help? This whole concept is foreign to me.
Thanks!
Answer I'm very sorry for the loss of your sister and I'm sorry that my answer is not likely to be good news.
A life insurance policy is a contract between it's owner and the insurance company to complete a transaction if the contract is in effect at the death of the insured.
In this case it appears that your father was the policyowner (decisionmaker) and the beneficiary of the proceeds according to the contract, and if the contract was still in effect at the time of your sister's death then the insurance company has fulfilled it's end of the contract by paying your father the death benefit.
What he chooses to do with the funds after he receives them from the insurance company, unfortunately, is up to him and I would doubt that there is a legal basis (despite the obvious moral issues) to challenge this.
If there are more extenuating circumstances than I have described above, then it would be most fruitful to contact a lawyer. Thanks and I hope this was helpful.
Sincerely.
Michael S. Feinberg, ChFC
President
Synergy Financial Services
1-866-404-8714
