Ask Joan

Week of March 14, 2008 • Previous Question Archive

Ms. Sabella has managed MainStay Balanced Fund since its inception in 1989. She is a Managing Director and has been with NYLIM since 2000. Prior to that, she worked at Towneley Capital Management, Inc. for 22 years. Ms. Sabella is a member of the Financial Planning Association, Financial Women's Association, and the CFA Institute. She holds a B.B.A. from Baruch College, is a Certified Financial Planner, and is a Chartered Retirement Planning Counselor.

Got a question you'd like Joan to answer?Ask Joan Now

Q: Can I take out a life insurance policy on a family member without their involvement? I have an insurable interest in caring for his children should an unforeseen death occur. I do not want to discuss with the insured person because of the difficulty emotionally of discussing this and fear that they will not want me to undertake the expense. Also the issue of beneficiary could complicate any potential discussion with the insured. I would remain as the beneficiary in order to manage funds for the children. Is it possible to take out the policy without their knowledge whatsoever?

A: Your concern is understandable and your financial obligation to these children is real. However, the insured must always be aware of the insurance and their signature is required on the application.

When New York Life underwrites the life insurance policy, there must be a determination if the beneficiary of the policy has an insurable interest in the insured. First there needs to be a legal insurable interest, for example a close family relationship, or lawful and substantial economic interest between the insured and the beneficiary. The amount of insurance must be reasonable in relation to the possible loss.

This article is intended to provide general information only and is not intended to provide investment advice or any recommendation to buy, sell or hold securities. The content of this article is not appropriate for the purposes of making a decision to carry out a transaction or trade, nor does it provide any form of advice (investment, tax, legal) amounting to investment advice or make any recommendations regarding particular financial instruments, securities, investments or products. Any information herein has no regard to the specific investment objectives, financial situation, or particular needs of any specific investor, and investments discussed may not be suitable for all investors. Neither NYLIM nor New York life will be liable for any errors or inaccuracies in such content or any actions taken in reliance thereon. As a registered investment advisor, NYLIM may render investment advice for compensation only as permitted under applicable US and state law.

Questions will usually be answered within the next bi-weekly posting of Ask Joan. If a question is particularly involved, or the answer depends on the specific circumstances, it may be possible to give only a very general answer. In these cases, you will be advised to seek more specific advice.

Ask Joan

A: Your concern is understandable and your financial obligation to these children is real. However, the insured must always be aware of the insurance and their signature is required on the application.

Be the first to Comment