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Life Insurance almost done.

March 8th, 2011 at 12:29 pm

Well tomorrow the nurse comes to take blood and urine samples and take my vitals and maybe ask some additional medical questions. Then shortly my life insurance should start.

I signed up for $250K worth of life insurance for 20 years with a rider for my child. The cost is like $36 (I forgot the exact cost). The policy is one that I can make changes to the policy once I have it without having to retake the medical exam. I wanted this because after my Ex-Husband came back from his deployment he was dignosed with PTSD and now can't get any life insurance besides the SGLI which would expire once he gets out of the military or the VGLI once he is out of the military BUT VGLI gets really expensive as a person ages.

I wanted to have this policy because when I get out of the military I can increase the payout by the amount of SGLI I have in place without a physical. I just want to make sure if something happens I have life insurance until my son is no longer a minor. I also wanted a policy so that if I ever got to a point where I was in a non-paper-documented-marriage-type-relationship that I could leave my partner some life insurance proceeds without the ropes that the military makes you jump through to list an unusual beneficary.

Right now I have $400K that goes to my son if something happens to me, I also have an additional $100K which goes to my brother to pay for funeral expenses, plane tickets and any bills that need to be paid between when I die and when the Insurance money is paid out, and whatever is left is his, he is the person who will carry out my will and he lives out of state. Then once I have the additional policy I will have $250K for my son.

I do need to write down some information to my brother, he is the trusty and I would like to give him some ideas on how I would like to see the money handled. Since the money should generate enough interest in my sons name he will have to file taxes and since he make enough to file taxes he would be elligable for a Roth IRA, so I want the interest up to the federal limit to be invested first into a Roth IRA for my son. That way in addition to the Life insurance providing for my sons living expenses it will provide for a retirement.

I plan to once my son is old enough to get a job to match any Roth IRA contributions to the maxium he is elligible to contribute (either fed max or max take home), I want to do this until he reaches age 23. Because if I do, then I have made sure my son will be a millionaire when he retires. If I am not around to do this myself then I want my life insurance procedes to accomplish this investment goal so it still happens.

1 Responses to “Life Insurance almost done.”

  1. creditcardfree Says:

    It wasn't clear in your blog, but your son cannot invest in a Roth IRA unless he has earned income, which life insurance proceeds are not. Once he has earned income then he can contribute only up to the amount of earned income for the year, if it is less than the Roth maximum. Of course, life insurance proceeds can still be invested in a mutual fund or stock, but not titled as a Roth IRA.

    He can inherit your Roth, if he is the beneficiary.

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