Originally Posted by
omro
As I've said before, she has told her children that they can expect to inherit the house, clear of debt, as her insurance will pay off the line of credit upon her death. She is 100% adamant that this is the case. So she is potentially raising false expectations.
I have told my husband, that depending upon her type of insurance, based on what I've read here, he can expect:
- her to stop having insurance coverage at a certain age, if term insurance.
- to perhaps have coverage, but potentially not all coverage when she dies, if she has set up a whole life policy.
I have told him that if the latter, since she set it up so late in life, the premiums may be very high and she may be wasting her money.
He is not happy about potentially losing his family home upon her death, if her debt remains as high as it is or increases and there isn't enough insurance to cover it.
I think it's a little melodramatic to assume that this will break the family up, at this stage or even in the future.
I would have assumed that insurance companies had tons of contingencies in place to make sure that elderly customers didn't wrack up huge amounts of debt against their home and then just die and expect them to clear it for the next generation.
My original purpose for posting was to determine whether her claims of being insured up to her death, even if that were in her 90s and through natural causes, could even be plausible. The conclusion that I've come to is, it's highly unlikely that she is covered as well as she thinks she is. Term life will end at a certain age, probably at most 80. Whole life insurance, started in her late 50s, may be so expensive that it might have been better to concentrate on simply paying off the debt and probably won't pay all her debt off.
If she won't let anyone see her policy, then the best thing to do would be to assume that to keep the house, everyone had better start saving towards that goal.