Newborn baby girl in New York life insurance deal!

[skyguy918]

As I posted earlier:

It's NYS insurance law:
http://codes.findlaw.com/ny/insurance-law/isc-sect-3207.html
They regulate the amount of insurance you can have on a minor. The underwriter at the issuing company is supposed to enforce it..

Here's the relevant quote from that law:

(b) An insurer may deliver or issue for delivery in this state a policy or policies of life insurance upon the life of a minor under the age of fourteen years and six months, provided that such policy or policies are effectuated by a person or persons having an insurable interest in the life of such minor or by a person or persons upon whom such minor is dependent for support and maintenance and provided further that an insurer shall not knowingly issue such a policy or policies for an amount which, together with the amount of life insurance under any other policy or policies then in force upon the life of such minor, is in excess of the limit of fifty thousand dollars or the limit of fifty per centum or the limit of twenty-five per centum in the case of a minor under the age of four years and six months of the amount of life insurance in force upon the life of the person effectuating the insurance at the date of issue of the policy on the life of such minor, whichever limit is the greater, and any amount of life insurance on the life of such minor not in excess of such limit when issued shall not be deemed to be in excess thereof by reason of any reduction thereafter in the amount of life insurance in force upon the life of the person effectuating the insurance.

The law is 25% of the coverage on 'the person effectuating the insurance'. That means whoever is buying it. Assuming the grandparent is considered to have insurable interest (and therefore can buy a policy on the grandchild), then the limit of coverage on the grandchild is based on the grandparent's coverage, not the parent's.

That's the law. If an agent thinks they can finagle around it, maybe they can and maybe they can't, but I'd be wary.

[ydf]

based on that do i only have to have insurance when i apply for the policy? Or the entire time of the policy?

[skyguy918]

based on that do i only have to have insurance when i apply for the policy? Or the entire time of the policy?

Answered in the same quote from the law I brought already (albeit a little more wordy this time).

(b) An insurer may deliver or issue for delivery in this state a policy or policies of life insurance upon the life of a minor under the age of fourteen years and six months, provided that such policy or policies are effectuated by a person or persons having an insurable interest in the life of such minor or by a person or persons upon whom such minor is dependent for support and maintenance and provided further that an insurer shall not knowingly issue such a policy or policies for an amount which, together with the amount of life insurance under any other policy or policies then in force upon the life of such minor, is in excess of the limit of fifty thousand dollars or the limit of fifty per centum or the limit of twenty-five per centum in the case of a minor under the age of four years and six months of the amount of life insurance in force upon the life of the person effectuating the insurance at the date of issue of the policy on the life of such minor, whichever limit is the greater, and any amount of life insurance on the life of such minor not in excess of such limit when issued shall not be deemed to be in excess thereof by reason of any reduction thereafter in the amount of life insurance in force upon the life of the person effectuating the insurance.

That last part means that as long as you had the right amount of coverage when the policy was issued to the minor, if you 'reduce' your amount of coverage later it has no effect on the minor's policy. Other's have stated earlier that you might want to keep it through the 2 year contestability period to be safe from any other issues the insurance company may try to dig up.

[ChasunaFund]

As I posted earlier:Here's the relevant quote from that law:The law is 25% of the coverage on 'the person effectuating the insurance'. That means whoever is buying it. Assuming the grandparent is considered to have insurable interest (and therefore can buy a policy on the grandchild), then the limit of coverage on the grandchild is based on the grandparent's coverage, not the parent's.

That's the law. If an agent thinks they can finagle around it, maybe they can and maybe they can't, but I'd be wary.

While you read the law well, you might have failed to read a little further down.

Here is what the law says in the NEXT paragraph:

(c) An insurer may deliver or issue for delivery in this state a policy or policies of life insurance upon the life of a minor under the age of fourteen years and six months for an amount or amounts of life insurance which may be in excess of the limit specified in subsection (b) of this section if the policy or policies are effectuated and the premiums paid by a person or persons having an insurable interest in the life of the minor and if the minor is not dependent upon such person or persons for support and maintenance.

Translated into simple English, this means that if a grandparent who is not providing direct support to the insured child is the applicant, there is NO LEGAL RESTRICTION on the ratio of the amount of insurance on grandparent to the amount of insurance on the child!

That being said, for risk management underwriting purposes, Allstate does want to see that (a) the grandparent is insured for at least the same amount as the child, possibly double, and (b) the parents of the child are insured for at least the same amount as the child.

There are circumstances where we legitimately get around this, on a case by case basis.

[skyguy918]

While you read the law well, you might have failed to read a little further down.

Here is what the law says in the NEXT paragraph:

(c) An insurer may deliver or issue for delivery in this state a policy or policies of life insurance upon the life of a minor under the age of fourteen years and six months for an amount or amounts of life insurance which may be in excess of the limit specified in subsection (b) of this section if the policy or policies are effectuated and the premiums paid by a person or persons having an insurable interest in the life of the minor and if the minor is not dependent upon such person or persons for support and maintenance.

Translated into simple English, this means that if a grandparent who is not providing direct support to the insured child is the applicant, there is NO LEGAL RESTRICTION on the ratio of the amount of insurance on grandparent to the amount of insurance on the child!

That being said, for risk management underwriting purposes, Allstate does want to see that (a) the grandparent is insured for at least the same amount as the child, possibly double, and (b) the parents of the child are insured for at least the same amount as the child.

There are circumstances where we legitimately get around this, on a case by case basis.

Lol, took you long enough to get on here

[Zalc]

Nice to have your here!
Is there a known date when this will end?

[ChasunaFund]

based on that do i only have to have insurance when i apply for the policy? Or the entire time of the policy?

There's a clear distinction between what the LAW requires, and what ALLSTATE wants to see from a risk management perspective.

The law requires a parent applying for insurance on a child to have 4 times the amount of insurance on the child (total in-force and currently being applied for). The policies are actually issued with an endorsement that clearly states that if it is found that at the time the policy was issued, the parent applying did not have 4 times the amount of insurance. The face amount of the policy will be reduced to the greater of 25% of the amount of insurance on the applying parent at time of application, or $25,000.

It is our belief that the 2 year contestability period does not apply to this rule. Technically speaking, if it is proven at ANY point that AT THE TIME OF POLICY ISSUANCE the applying parent did not have 4 times the amount of insurance on the child, the policy could be void ab-initio (from day one).

The big question is who might find out and when.

We are fearful that the huge influx of these policies, might prompt either an internal insurance company investigation, or a STATE REGULATOR investigation into these policies at some point (though we doubt it is likely to happen beyond 2 years out). That is why we are INSISTING that parents applying through us have at least 4 times the amount of coverage being applied for (only the applying parent is required by law). We don't want anyone to be disappointed down the road.

ALLSTATE wants to see the following in addition to State Law:

• No parent should be insured for less than the child
• All siblings should be insured for the same amount
• If grandparent is applying, amount of insurance on grandparent and on both parents

However, since these are risk management factors and not state law, it falls into a totally different category if trying to rescind a policy. I highly doubt that a REGULATOR would look into this, if anyone, it would be ALLSTATE looking into this. If they get the slightest pushback from a policy owner for whom they are trying to rescind a policy, they have to go to court. How likely is that to happen with the amounts at stake here???

[ChasunaFund]

Nice to have your here!
Is there a known date when this will end?

We are not aware of an OFFICIAL date from Allstate, but the rumor in the grapevine has it that it's mid to late January. I wouldn't recommend anyone wait to the last moment. If something goes wrong and one needs to reapply, you don't want to face that situation where it's no longer available.

[ChasunaFund]

Here are the actual numbers and rates of return for the two younger ages

[ChasunaFund]

And the two older ages

[Ergel]

What are the boys rates?

[peacenlove613]

Can I signup before I get my baby's social and/or birth certificate?

[ChasunaFund]

What are the boys rates?

The only reason this is a great deal is because of a pricing glitch for girls of certain ages. We can help you with boys, but don't expect anything close to these returns.

[ChasunaFund]

Can I signup before I get my baby's social and/or birth certificate?

Yes. Though it's a little bit of a hassle without a SSN

[edgeman]

My wife and I each have 500k of coverage. can we take out a joint policy and split the 4x requirement?

[lunatic]

My wife and I each have 500k of coverage. can we take out a joint policy and split the 4x requirement?

Make a grandparent the owner

[edgeman]

Make a grandparent the owner

but grandparents dont live in ny. they are coming to ny in january though...

[lunatic]

but grandparents dont live in ny. they are coming to ny in january though...

I doubt that it matters

[ChasunaFund]

My wife and I each have 500k of coverage. can we take out a joint policy and split the 4x requirement?

No.
Law is clear. Applying parent must have 4x.
The real question is why are you insured for so little?

[ChasunaFund]

but grandparents dont live in ny. they are coming to ny in january though...

No one needs to live in NY. All that has to happen in NY is the signatures on the application......