My Bank As a Beneficiary

[LGilmore]

Rather than guess, the OP really needs to provide more information. The reason we're asking why is people don't usually make banks their benies without a financial reason. Most people don't out right give banks money, which it looks like you're asking about because you've edited. So everybody is guessing. If you can, provide a bit more detail. thanks.

 

[Winter_123]

Humane Society is a different thing, that's a charitable donation. Underwriters sometimes take issue with listing a girlfriend as a beneficiary so frequently girlfriends get upgraded to fiances.

Coincidentally, the Commonwealth of Virginia is very clear about this point Code of Virginia § 38.2-301 - Insurable interest required; life, accident and sickness insurance :: Chapter 3 - Provisions Relating to Insurance Policies and Contracts :: Title 38.2 — INSURANCE. :: 2006 Code of Virginia :: Code of Virginia :: U.

Feel free to point to another source, but the insurance interest requirement is on the beneficiary. I'm sure folks actively selling life insurance can also tell their stories of situations where underwriters kick policies back on this point.

No. The statute cited defines insurable interest which allows ownership of a policy but does not require beneficiaries to have an insurable interest.

"A beneficiary, however, is not required to have an insurable interest, though often does."

Insurance Beneficiaries - Financial Web

 

[Josh]

You obviously didn't bother to read the Virginia law. No worries, it's obvious one of us is wrong and we both think it's the other party. Enjoy your evening.

 

[Winter_123]

You obviously didn't bother to read the Virginia law. No worries, it's obvious one of us is wrong and we both think it's the other party. Enjoy your evening.

Another citation below to add to the first one that I gave you. Your legal view notwithstanding. This is actually a very fundamental point of insurance law so you would do well to educate yourself a bit. Although I have provided two quick and simple references to help you, an unlimited amount are available since this is an established principle of insurance law.

"Where the insured is the owner of the policy, as discussed above, anyone may be named by the insured as beneficiary, and the beneficiary need not have an insurable interest in the life of the insured."

B—Insurable Interest

 

[scagnt83]

What the regs say and what the carriers require can be different. Often that is because of litigation thats occurred after the regs were written.

Most carriers require the both the Owner & Beneficiary to have an insurable interest in the Insured.

 

[Josh]

If you insist, I cited the law of the Commonwealth of Virginia; the state that actually grants my license to sell life insurance.

2006 Code of Virginia § 38.2-301 - Insurable interest required; life, accident and sickness insurance

38.2-301. Insurable interest required; life, accident and sicknessinsurance.

A. Any individual of lawful age may take out an insurance contract uponhimself for the benefit of any person. No person shall knowingly procure orcause to be procured any insurance contract upon another individual unlessthe benefits under the contract are payable to (i) the insured or hispersonal representative or (ii) a person having an insurable interest in theinsured at the time when the contract was made.

So far you've cited finweb.com, Internet Brands company, as well as logos4me.com. Somehow I think the state licensing and regulating insurance might serve as a more credible source.

Insurance is regulated at the state level (or so we've been told), so it's entirely possible different states will have different rules. Though I doubt (m)any differ that far from Virginia, you're not going to win me over without citing something from a more credible source.

Coincidentally, the state I originally got licensed in (NY) has the same requirement:

"(2) No person shall procure or cause to be procured, directly or by assignment or otherwise any contract of insurance upon the person of another unless the benefits under such contract are payable to the person insured or his personal representatives, or to a person having, at the time when such contract is made, an insurable interest in the person insured."

Insurable Interest Requirement (Life Insurance)

So my citations are from the actual law regulating the insurance and your citations are from finweb.com and logos4me.com.

 

[Winter_123]

If you insist, I cited the law of the Commonwealth of Virginia; the state that actually grants my license to sell life insurance.



So far you've cited finweb.com, Internet Brands company, as well as logos4me.com. Somehow I think the state licensing and regulating insurance might serve as a more credible source.

Insurance is regulated at the state level (or so we've been told), so it's entirely possible different states will have different rules. Though I doubt (m)any differ that far from Virginia, you're not going to win me over without citing something from a more credible source.

Coincidentally, the state I originally got licensed in (NY) has the same requirement:

"(2) No person shall procure or cause to be procured, directly or by assignment or otherwise any contract of insurance upon the person of another unless the benefits under such contract are payable to the person insured or his personal representatives, or to a person having, at the time when such contract is made, an insurable interest in the person insured."

Insurable Interest Requirement (Life Insurance)

So my citations are from the actual law regulating the insurance and your citations are from finweb.com and logos4me.com.

Interesting that you have twice cited statute or regs which cover the procurement of ownership of a policy on another person. This is not the definition of a beneficiary so if you can't get past that initial confusion you just continue to go in circles.

In regard to the issue of state requirements varying, this is of course true. But your answer to the OP was a flat out statement that "beneficiaries must have an insurable interest." If you had said "I checked the laws and regs in California or advised him to do so then that would have been a higher quality answer which I would have no quarrel with.

And it is also true as some have suggested that some states and many carriers require the beneficiary to have an insurable interest even if the laws and regs do not. However, many/most also do not preclude a change of beneficiary to someone who does not have an insurable interest after the policy is issued. Let us not forget that it is the OP that is seeking help and he/she is seeking a means of arriving at what he is trying to accomplish. If some states require X,Y or Z does not mean that they all do or that all states require something just because some do or that all states prevent a change of beneficiaries after issuing just become some may or may not.

It is quite possible that the OP can accomplish what he wants but will need to navigate the system by finding out what is allowable within his state, with various carriers and so on. I have no quarrel with that. But a blanket statement that a beneficiary must have an insurable interest -even including after issue and re-designaton- is not something you can flat out say without knowing the facts. If you want to do some homework then that is another matter. What are the regs in his state and which carrier is he going with. Oh, you don't know. I see.

Again, it is troubling that you repetitively cite regs that apply to the proposed owner of a policy- not the beneficiary. Hard to make any progress if you are still stuck there.

 

[meclimit]

Scagnt83 is once again correct. What company wants to issue a policy where the beneficiary has a greater interest in the insured being dead than alive? A recipe for homicides and lawsuits (similarly property insurers won't insured a home for more than its worth for similar reasons).

Plus insurers have learned that the business itself is less persistent. Today's girlfriend or boyfriend can easily be kicked to the curb tomorrow and the policy lapsed just as quickly.

 

[Josh]

Again, it is troubling that you repetitively cite regs that apply to the proposed owner of a policy- not the beneficiary. Hard to make any progress if you are still stuck there.

Apparently you're having a difficult time reading. It specifically talks about the beneficiary having insurable interest.

Again, not to worry, hardly the first time people on the internet have disagreed and refuse to believe the other party is correct.

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If some states require X,Y or Z does not mean that they all do or that all states require something just because some do or that all states prevent a change of beneficiaries after issuing just become some may or may not.

Entirely different kettle of fish. Insurable interest for life insurance, as Kirby pointed out, generally only needs to exist at the inception of the policy. Once it's issued, I don't think changing it has the same requirement.

 

[DHK]

Beneficiaries cannot benefit from life insurance if they commit or conspire to commit the homicide of the insured/contract owner.

Remember the definition of STOLI: Stranger-OWNED Life Insurance. This is the "black widow" problem of people buying insurance on homeless people and then running them over with their car. But this was about policies OWNED by people who don't have an insurable interest in another person's life.

Now, all that being said, there SHOULD be a justifiable reason to list a particular person or entity as a beneficiary - either a family member, significant other relationship, or a qualified charity.

Life insurance is a social benefit and a social contract... to benefit individuals who would stand to have an economic loss based on the death of the insured. If there's no economic loss... why buy life insurance?

I will say this... if there's no real reason to have a death benefit... then it isn't an ethical life insurance sale for the agent. I'd have to write a cover letter in order to explain the designated beneficiary... and I'm not sure I'd want to be the signing agent because someone "loves their bank".

Now, if the bank has a charitable philanthropic arm... that would be different... but I wouldn't want this transaction because the risk of a complaint would be way too high.

There are too many complaints against agents who sell life insurance as ONLY a supplemental retirement account... and yet when asked, the people who bought these policies did NOT need life insurance.

This link is an example of one of these kinds of cases.
ProducersWeb - Life - New lawsuit against agent for selling a VUL

There are two reasons to buy life insurance:
- You love someone
- You owe someone

You ask the question: "Who need money and how much?" If they say "the bank" it's to pay back a debt, not because you "love them".

I wouldn't write this policy as an agent or have my name associated with it.

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However, as it was said, once the policy is issued, life can change. Beneficiaries can change as priorities change.

You can change the beneficiaries... but I certainly would be documenting my files that I had nothing to do with recommending a beneficiary that is a non-charity or a non-individual.