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Info Seeker
Posts: 1
Registered: ‎07-20-2017

Re: AARP Term Life Insurance/S.S.I.

Message 1 of 9 (1,167 Views)

Good Day,

 

I am looking for term insurance to cover my adult son (36 yrs old) who is on SSI...any ideas?

 

Thank you

 

Debi Wilson-Bailey

Info Seeker
Posts: 3
Registered: ‎05-06-2015

Re: AARP Term Life Insurance/S.S.I.

Message 2 of 9 (5,732 Views)

First of all, don't feel bad, for there is tons of misinformation out there! For starters, all life insurance has a "face value". The face value of any life insurance, is simply the benefit amount the life insurance company will pay upon your passing.

 

Secondly, there are different types of life insurance. Some life insurance builds what is called cash value. Think of cash value as a mini savings account built into the life insurance. You can borrow from this amount, or even use it later on to alter your policy in various ways. You mentioned term life insurance in your post. Term life insurance has a predetermined expiration date (usually 75-80). For example, AARP's term plan expires at the age of 80. All term life insurance, regardless of which insurance company it's from, does not ever build any kind of cash value. Pretty much all other types of life insurance outside of term, will indeed build some kind of cash value.

 

Every state is different in regards to its rules for life insurance when people are on SSI, Medicaid, or other government assistance programs. Having said that, any rules subjected to recipients of said programs, will very often govern cash value. We do business in most of the 50 states, and never once have we encountered any rule governing the face value of life insurance. In case you are wondering why, it's pretty simple. A person on SSI or Medicaid for example, they can't actually do anything with the face amount of a life insurance policy. However, if they have a life insurance plan that builds cash value, they can take that cash value and buy clothes or a car etc. Cash value is tangible, and the face value is not. This is why some states have rules limiting how much cash value a policy can accrue.

 

If you live in a state where SSI or Medicaid limit how much cash value a life insurance policy may have, often assigning ownership of the policy will bypass this rule. Assigning ownership of your policy simply means that you designate another person as an owner of the policy. They then would be the person who would own any cash value, and they would be in control of the policy itself. They could even go so far as making changes to your policy, or cancel it if they were so inclined. As long as you assign ownership to someone you trust like your children or close family, there won't be any issues. You should seek clarification on your state specific rules before executing these changes. Your agent, provided you work with one, should be able to provide crystal clear answers to these scenarios. We have helped people in these situations many times, so it's something we are very comfortable navigating.

 

We specialize in permanent life insurance primarily to help people ensure their funeral expenses would be covered. However, we are very comfortable answering questions about term life insurance too. If you have questions about your situation feel free to contact us. We would be happy to help guide you. https://funeralinsuranceprograms.com/

 

Best of luck to you!

Info Seeker
Posts: 1
Registered: ‎03-14-2014

Re: AARP Term Life Insurance/S.S.I.

Message 3 of 9 (5,932 Views)

 If, as "DrawPoker" pointed out, you donate your body to a medical school and they cremate your body, what happens to the Cremains? Can the family get them and dispose of them, plant them under the Cherry Tree, or let the Neptune Society scatter them? (or as my mother did, leave a little of my father, wherever they had special memories) Or are the Cremains property of the Medical School at that point?

Valued Social Butterfly
Posts: 1,696
Registered: ‎06-25-2013

Re: AARP Term Life Insurance/S.S.I.

Message 4 of 9 (8,643 Views)

This thread has got life insurance all fouled up.  

As GailL pointed out,  life insurance is really to protect dependents from the loss of income that occurs when someone dies and is no longer bringing home a paycheck.  

To me,  it doesn't sound like either the OP from last year or you,  GRowe,  are talking about protecting dependents.  At least (like GailL) I sincerely hope not.

As for "burial insurance" which is allowed under SSI rules,  well,  er,  um,  is this something that you really "need"?  

No matter where you live,  you can donate your body to a medical school,  they will pick up the transportation costs,  cremate your remains (again,   no cost to your estate) and that's it.   No costly funeral home involved,  no costly embalming fees,  a casket,  a cemetery plot. 

Nothing.   Nada.  You won't cost your relatives (if that is what worries you) one **bleep** cent for anything.  

Really,  it is the only way to go.   If your family will be buried under a mountain of guilt over handling things this way,  they can hold a dignified memorial service,  either at a church or some other suitable venue.  Even outdoors in a public park if the deceased was an outdoorsy-type. 

People should really re-think buying "burial" insurance.  

Info Seeker
Posts: 1
Registered: ‎09-08-2014

Re: AARP Term Life Insurance/S.S.I.

Message 5 of 9 (8,658 Views)

Thank you so much for clearing the Term and Whole Life Insurance definition for me!  I need to get some insurance but was so confused as to what kind to purchase.  I retired 10 yrs ago and rolled over into long-term disability that covered my life insurance policy thru my job benefit package.  When the long-term disability ended so did my life insurance policy.  The COBRA package they offered me for life insurance was over $800. per month and much more than I could afford on a fixed income. At age 66 and miraculously still alive with no life insurance, I know I need some insurance coverage to at least pay for my total funeral expenses.  Whatever coverage I can get will be costly but hopefully not over $200. per month.  Again, thank you for your help!

Frequent Social Butterfly
Posts: 217
Registered: ‎04-30-2013

Re: AARP Term Life Insurance/S.S.I.

Message 6 of 9 (9,629 Views)
Hi Lady in Maine,

Term Insurance does not accrue any cash value while you have the policy. 

For example, if someone has a $10,000 term policy for ten years, that is all that it is worth. It doesn't change for that ten years. If something happens to that person and they die, their beneficiary gets $10,000. 

If someone buys a whole life policy for $20,000, that policy will accrue interest and will also have a cash value, too. That person can take a loan against the policy if they want to as long as there is enough  money that has accrued so that the person can do that, but that will decrease the amount of the policy if the loan isn't paid back and the person dies. If the policy is left alone, when that person dies, their beneficiary will receive any interest that was left to accrue on the policy, too.

Here is a link that explains the difference between term insurance and whole life insurance:

Valued Social Butterfly
Posts: 8,600
Registered: ‎08-18-2008

Re: AARP Term Life Insurance/S.S.I.

Message 7 of 9 (9,631 Views)
Rule of thumb for any life insurance - it is for the living, not the dead.

You get life insurance to replace the income that you would have provided to someone had you lived.

In your case, since you are receiving SSI, I am hoping that you are not supporting someone else on this meager income.
You will also have to be rated on your current health and age - which may (most likely) up your premiums.

What is your rationale for even wanting to spend a monthly amount out of your SSI funds for term life insurance?

If you die, all life insurance does have a cash value.  But that is not what the SSI eligibiltiy criteria is describing.  But again, from what you have said, even term life does not seem like a good value for you.  If you live solely on SSI, your money would be better spent on a roof over your head, good food, warm in winter, people to help you for various necessities if required - the necessities of life.
Info Seeker
Posts: 4
Registered: ‎09-19-2013

AARP Term Life Insurance/S.S.I.

Message 8 of 9 (9,625 Views)
I am having trouble obtaining definitive information about whether a person who lives solely on Supplemental Security Income would be allowed to purchase a small amount of NY Life term life insurance through AARP.  I've never known much about life insurance; I'm trying to educate myself, so please be considerate in your responses.

I'm aware that those on S.S.I. can own life insurance as long as the policy's face (cash?) value doesn't exceed $1,500.  It seems I read several times that term life insurance doesn't have any 'face value', so I was hoping I could get that.

But then I called AARP and asked about this, and the person I spoke with said that all kinds of life insurance eventually build cach value.

So, am I to conclude that the most life insurance I would be allowed is $1,500 worth?
Info Seeker
Posts: 4
Registered: ‎09-19-2013

AARP Term Life Insurance/S.S.I.

Message 8 of 9 (9,632 Views)
I am having trouble obtaining definitive information about whether a person who lives solely on Supplemental Security Income would be allowed to purchase a small amount of NY Life term life insurance through AARP.  I've never known much about life insurance; I'm trying to educate myself, so please be considerate in your responses.

I'm aware that those on S.S.I. can own life insurance as long as the policy's face (cash?) value doesn't exceed $1,500.  It seems I read several times that term life insurance doesn't have any 'face value', so I was hoping I could get that.

But then I called AARP and asked about this, and the person I spoke with said that all kinds of life insurance eventually build cach value.

So, am I to conclude that the most life insurance I would be allowed is $1,500 worth?