Was my cousin allowed to buy life insurance for my mother?

Dear Benny,

My mother passed away several years after from Alzheimer’s disease in the Philippines. While she was living in Maryland, her cousin took out an insurance policy on her. She agreed knowing that she would only pay $50 a month and that her niece would take care of the rest.

My cousin is now asking for four death certificates and she wants me to fill out forms because I’m, she says, the beneficiary. If she is the owner of the document, what is her relationship to me? I asked for a copy of the policy because I have no idea what you’re trying to do. please help.

Confused daughter

Dear confused,

Trust your feeling. Don’t give your relative your mother’s death certificate or any personal information she asks for.

There are a lot of things that seem superficial here. The biggest red flag is that your cousin has your mother’s life insurance policy. You can’t just get an insurance policy on anyone. Just imagine how widespread abuse of the system would be if we could all bet on each other’s lives.

To own someone else’s life insurance policy, you must have an insurance interest in their life, which means that you will suffer a financial loss in the event of his death. It is usually assumed that you have an insurable interest in the life of your spouse or child. You can even have an insurable interest in your ex’s life if they are required to pay alimony or child support. But your niece is not likely to have an insurance interest in her aunt’s life, unless there are unusual circumstances – such as business partners or your cousin has signed a loan to your mother.

You also need the person’s consent to get life insurance. I have to wonder: Did your mother fully understand what she was expecting? Or if you only recently found out about this policy, is it possible that your cousin has forged her signature? It’s also strange that your mother made partial payments if your cousin had the policy.

It is unreasonable for your cousin to buy life insurance for your mother out of her heart. The more realistic explanation is that it plans to reap most, if not all, of the proceeds.

You can continue to press your cousin for a copy of the policy. But don’t be surprised if you encounter a flurry of complicated excuses and explanations. Even if your cousin gave you the document, I wouldn’t assume it was legit. Contact the insurance company directly to verify the policy. You can submit the death certificate directly to the insurance company if it is legitimate. The company can send you any necessary forms.

If your cousin doesn’t cooperate, you can search the life insurance policy locator of the National Association of Insurance Commissioners. The organization will require participating companies to search for policies in your mother’s name. If they locate a policy and you are the beneficiary, they will give you the details. Your cousin does not need to participate. Even if you are not a beneficiary, you are likely to be entitled to receive this information as your mother’s next of kin.

If you think your cousin has nefarious intentions, consider contacting the state insurance commissioner. Some people are reluctant to report their family members to the authorities. But if you suspect that your cousin cheated on your mother, she can easily do the same to others. Older adults are especially prone to being deceived by people they trust, such as family members. At the very least, you should warn other family members if you think this is what happened.

Your cousin may have obtained identifying information about your mother, such as her Social Security number, when she got the policy. Unfortunately, deceased people are at risk of opening fraudulent accounts in their names. A smart move is to contact each of the three credit bureaus to let them know your mother has passed away.

I’m sorry you have to deal with all this plus the loss of your mother. But you have every right to be suspicious here. Don’t let anyone, especially your cousin, tell you otherwise.

Robin Hartell is a certified financial planner and senior writer for The Penny Hoarder. Send your tough financial questions to [email protected].

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