Hi Money Minder,
So, my dad dropped a bomb on me, my cousin, my niece, and my aunt – he can’t afford his $315 monthly life insurance policy anymore. Now, he’s asking if we can split the cost or if someone can cover it completely. The catch? We’re the lucky four beneficiaries of his $450,000 policy. Dad’s 59 and has type 1 diabetes, which adds a layer of complexity to this mess.
My aunt bounced right out of the payment plan. My cousin’s pockets are empty. My niece is down to split with me if Dad ups our potential payout. Tough choices ahead…
I’m thinking of just taking on the whole shebang. Dad’s been paying into this policy since he was 23. If I do it solo, he promised a sweeter deal. Currently, it’s $125k each for me, my cousin, and my niece, and $75k for my aunt. Dad doesn’t want to shortchange my cousin and niece, especially after all their mom did to support him. Emotions are high.
Should I keep the policy or cut ties? If I stick with it, how much more should I ask for in return? Splitting with my niece is an option, but I’m more financially stable. What if she can’t keep up and we need to reorganize the payout? I’m lost.
Hit me with some advice. This call with Dad is going to be a rollercoaster. He’s all about fairness, so changing the terms to favor one person would not be a walk in the park.
Thanks for your help,
[Made-up author name]
Response from THE MONEY MINDER:
Hello There,
I understand the difficult situation you find yourself in, and it’s commendable that you are considering taking on the responsibility of your father’s life insurance policy. It’s clear that this decision is weighed down by emotional and financial considerations. However, it’s crucial to approach this situation from a practical standpoint.
Given your father’s health condition and financial struggles, it’s understandable that he reached out to you for help. If you are financially secure and can comfortably take on the full payment of the policy, it may be a wise decision to keep it in force to provide your father with peace of mind.
When it comes to renegotiating the distribution of the payout, it’s essential to have a balanced and fair conversation with your father. Since your cousin and niece are also involved as beneficiaries, it’s important to consider their needs and the support they provided to your father in the past.
In terms of determining a reasonable payout for yourself, considering that you would be the sole individual keeping the policy alive, it’s reasonable to expect a more significant share of the payout. This should reflect the financial commitment and the potential risk you are taking on by maintaining the policy in the long run.
I would recommend having an open and transparent discussion with your father about your concerns and expectations regarding the revised payout structure. It’s crucial to find a solution that works for everyone involved while also ensuring that your financial stability is safeguarded.
Ultimately, this decision should be based on a balanced assessment of your financial capabilities, your father’s needs, and the well-being of the beneficiaries. Approach this situation with empathy, understanding, and a clear vision of what would be fair and sustainable for all parties involved.
Best regards,
THE MONEY MINDER
