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Baby Insurance Policy Question & Answers

2014 March 24
by Sarah Fields

Mark asks…

Information on cashing out a whole life insurance policy?

My parents bought a whole life insurance policy for me when I was a baby. It is only worth $6,400.
The initial face value was $1000. It doubled when I hit 18, tripled when I turned 21 and has accrued dividends totaling the amount above. I would like to use that money to pay off some debt ( I have other life insurance) What are my options? I do NOT want to use it as a loan that I have to repay.
Any info is appreciated as I don’t want the insurance provider to be the only source of info on my options. Thanks.

Sarah Fields answers:

You call the company and cancel it. They’ll likely send you what they call a “cancellation” or “surrender” form.

Susan asks…

How do I establish a Trustee for my life insurance?

I want to change the beneficiary of my life insurance policy from my husband to my son. Since my son is only a baby I need to set up a trust for him in case something happens to me while he’s still a minor. I want my sister to be my Trustee but how do I set that up?

Sarah Fields answers:

You want to change the beneficiary to the TRUST. The legal guardian of your son WILL get the control of the money.

So, you use the life insurance to fund the trust. You have to talk to a probate attorney to set up the trust – but you might be able to have it set up after your death. It’s the trust that names the trustee.

Robert asks…

How to take out an insurance policy?

So Im pregnant and I dont qualify for medicaid and that means neither does my baby. My husband recently got a job but benefits wont kick in til 90 days and our baby will be here in 74 days. So therefore the only choice I have is to take out an insurance policy for 1 month til his benefits kick in. Any suggestions?
I dont need it for me, I need it for when the baby is born

Sarah Fields answers:

You can’t. It’s too late.

You are completely uninsurable, while you are pregnant, on private health insurance. Your ONLY options are welfare, if you can qualify – which you said you can’t; or group health insurance through an employer, where you can be added and pregnancy isn’t allowed to be considered a preexisting condition.

The time to worry about insurance for your pregnancy, is BEFORE you get pregnant, not after. After, it’s like trying to buy house insurance, while the house is on fire; or trying to buy lottery tickets, AFTER the number is drawn.

Insurance is pooled sharing of UNEXPECTED losses. Not expected losses. Expected losses, no one wants to SHARE them with you! Just like YOU didn’t want to share them, before you got pregnant, by buying your OWN coverage.

**No idea what “you don’t need it for you” is supposed to mean, you’re already planning on self paying for the birth? If so, good for you. Thanks to Obamacare, you cannot buy child only insurance policies, so you’ll be paying for a family plan, if you include baby. Also, you won’t be able to get coverage on baby for that first year, that doesn’t have a MASSIVE deductible on it. All those “well baby” checkups and shots, add up – roughly, to $8,000 to $11,000, that first year, IF nothing serious goes wrong.

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