Partner has his mum on life insurance - AIBU?

[ellie09]

Hi all

I am getting married soon, and just wanted to see if AIBU for this?

Partner and I both have life insurance policies. For now, mine is set to go to my child (with my mum as guardian if he is under 18) but I had told him this will be changing to reflect him as my new husband once we are married, with money being split between him and any children we have.

We are going to buy our first house not long after getting married, in which will obviously be both of us paying the mortgage.

When my partner told me his plans, he said he wanted to split his between me, any children and also his mother.

For reference, his mum has no mortgage as the house is paid off and children are all grown up (except 1 non verbal autistic son who will need life long care, that his sister is providing at the moment).

This is the first time I have heard anyone making such an arrangement and its took me back a bit.

I have explained to him, in the event he unexpectedly dies, or becomes ill and dies, he needs to look after his primary family first, so we have the means to pay for our house, and any children can maintain a good life. With the house we want etc, there is no way I could afford this on my wage alone, and it would have to be sold. Not to mention, next of kin (your spouse) will need to pay for funeral costs and clear any outstanding finance debts (car, agreements etc). I have tried explaining this is why people would designate their life insurance to their spouse and children, then perhaps leave some money from savings etc to gift to a mother etc.

He stills says he would put his mum down to receive a certain % of the insurance policy.

AIBU?

The thought of putting my mortgage free mum on mine never crossed my mind, and my only thought is keeping my primary family with a roof over their heads in the event that I would die.

If you have a mortgage the life insurance would need to cover that so if he wants to give some to his mum he would need to increase his cover and pay higher premiums

It really does depend on actual figures.

How much percentage is he leaving his mum and how much is that in money?

That is odd and not something you should ignore. You really need to get it put in the open and discussed to your mutual satisfaction now, before either of you become obliged by marriage to do something you aren't sure of

He may have good reason, like his brother, but you need to have a full and frank discussion so you both understand the other's perspective and the issues it could raise, like premiums needing to be raised enough to cover a mortgage and a pay put to his mum

Acting on full information is key

Is it to contribute to his brothers care to help his mum and sister. Does his sister have a life/family? Sounds a nice thing to do although I’m on the fence which is rare and can also see your point of view.

I think really you both need to give 100% to the other up to the value of the mortgage.

Re: his mother whether it’s unreasonable depends on a lot of things eg how close is she to the inheritance tax limit, what sort of pension arrangements she has, whether he financially supports her now etc.

Does he currently own a house? Who is paying for the deposit on the house you’re intending to buy? Has his DM gifted him money for a previous or future deposit? Maybe he just wants to return that money in the event of his death?

Is your child his? Sound like your child looses out the most if you die as they’d only get a small cut if you’ve already had a few kids with the new guy, and they might not even have a suitable guardian to look after them

We had a joint decreasing policy for the mortgage, and then another one each for a different amount for living costs. If you did that the mortgage policy could pay out to you only. Also check and see who he has nominated for pension and/or death in service benefits (if applicable). Ideally also have wills. We hadn’t got round to wills but having all the insurances and beneficiaries agreed and documented helped enormously.

Whatever you decide about life insurance, please ensure that your pre-marital assets are ring fenced for your son. There is no guarantee that your DH will treat your DS equally with other children you may have together.

An mortgage insurance policy (only valid of one of you dies during the loan term) to cover the mortgage is normally assigned directly against the outstanding loan ( and reducing in payout to match the loan) so you/he sign that over as a security to the bank under your loan contract.

An assurance (you know you will die at some stage) life insurance policy which is for a fixed sum is a different product.

Your partner has no legal obligation to look after your son if you died.
He would have a legal obligation to look after his&your children.

If you reduce the sum you are putting aside for your son and giving it to your husband while you have no other children you are choosing to do something similar to his allocating a % to his mum.

Can I suggest that the starting point of buying life assurance should be you both work out what financial cover you both need to live lifestyle
• you&husband plus your son
• you&husband plus son&other children
And take account of earning differences plus how child care cost would change over each career.

Once you both understand why you are buying the policy and how you expect it to be spend can you have a proper financial discussion.

There was somebody on here not long ago. Can't remember if they were married or not, but only been together a few tears, had a child, he died and she lost the home, mother got everything and refused to give anything to grandchild. It happens!

Whilst it definitely needs discussing before marriage, realistically there's nothing stopping him changing his beneficiary nomination form to leave it to whoever he wants, regardless of what he says to or promises OP.

I think you can get your life insurance set up as a trust & it can't be altered, so you MUST really check this out OP, as it doesn't seem that he understands that you are a 'team'. 🫤

There needs to be an insurable interest (II) for anyone named on a life assurance policy as the beneficiary. An II means that the person named is dependent and would suffer hardship on the insured person's death.

It's not at all obvious in this instance that there is an II in respect of his mother - there usually wouldn't be, unless, say, she was living in a house that he was paying for, or he was paying regular amounts to her to fund her living costs, care etc.

So he needs to take professional advice, otherwise the policy could be declared void. I don't know what that would mean in respect of any other beneficiaries, ie you, but clearly you don't want to be in a position whereby nothing was paid out.

And yes, it's a really odd thing to be doing, regardless of the legal position, and one that you have every right to be uncomfortable about.

I think you just need to adjust the level of cover you each have to reflect what you’d wish to leave eg

mortgage on house is £100k

DP’s life insurance: £400k
£100k to pay off mortgage
£100k to you
£100k split between any dc
£100k to mum

Your life insurance: £300k
£100k to pay off mortgage
£100k to DP
£100k split between yours and subsequent DC

My ex took me and our 3 children out of his to put his wife to be on instead.

I think it should be split 4 ways, her and our 3 children. But he thinks he should make sure she and her kids are okay first. They've been together 18 months. 😂

I doubt he will give his mum the bigger share (though you never know!) but I'd pick your battles and you can't really force him if he wants to make sure his mum and family are okay aswell, it is what it is. Your not completely out just sharing?

Is the child you already have your bio child but not his? I'm wondering if he is crudely "evening things out" by factoring someone from his side into his beneficiaries as you have factored in your bio child to yours? I'm not saying i agree with that but there is some logic to it.

If something happens to you, are you confident he will care for your DS?! I wouldn't be changing your own life insurance policy if that is how he thinks…he has no legal obligation to a step child. I’d probably be thinking hard about marrying him to be honest - meanness is a horrible personality trait that’ll only get worse the older he gets!

He’a leaving some of his insurance to his Mother, you are leaving some of you insurance to your child.
Technically there is no difference in what both of you are doing. A third party benefits in each scenario.

There’s a big difference, in that parents are not usually financially dependent on their children. And life insurance is only permitted by law where the person who will benefit has an “insurable interest”. If there is no insurable interest the contract could be voided.

When you buy house together you both need to insure your lives to ensure the mortgage would be repaid. This is often a decreasing cover insurance as it's cheaper. He could set up a separate life insurance for his Mum and you could set one up for your DC. You will need to consider any death in service policy insurance his employer pays for him too. This might be in his Mum's favour but when you marry he should change it to you. I know my adult eldest DS has put me and his brother equally on his death in service but when he gets married I will remind him to take me and his brother off and put his new wife on. My youngest gest DS is single and I know he has also nominated me and his brother. In reality if anything happened to eldest DS before he got married and insurance came to me I'd pay for his funeral then immediately give what was left from my half to his partner.

Thanks for all your responses - a lot to bear in mind

For clarity, my son is not bio child to my upcoming husband - and my child's bio dad is involved, but doesnt have a "professional job" by any means (low income) so I want to ensure my child gets as much financial assistance from me as he can in the future. He also has a Junior ISA where I put away money for him each month, and a savings account where I am putting money away for his future.

Obviously if I have more children with current DP, I would want to assist them in every way possible too, but will also need to bear in mind that they will have two parents on a good income and not just one.

Easiest thing would be to either change current policies so neither of you would struggle in the future or leave current policies as they are and take out a new joint life policy, covering mortgage, debts, funeral costs and whatever else you can afford cover-wise in the premiums.

Has your new partner committed to be guardian for your child if you die? If not perhaps you should still be leaving money directly to your child with your mum administering it.

It is worth remembering that step-children don't automatically inherit in wills or under laws of intestacy. If you and your partner had mirror wills to leave everything to each other and then, on the second death, leave everything to your kids then your partners will would have to specifically include your child (his step-child). Also when someone inherits they are free to go on to change their own will and can leave out a child if they choose to.

My mortgage had a tiny and I mean tiny extra charge that covered the full remaining amount in the event of death.
My workplace had a small payout in the event of death during my employed years that would cover funeral costs. My DH’s workplace has a more generous plan that carries over into retirement at zero cost.
We never bothered with Life Insurance.
Your husbands % though is it meant for the disabled brother? Which is kind, but chances are he will outlive his mom so the beneficiary might need to switch to the sister in trust etc.

I was going to vote YANBU then I saw the throwaway comment about his sibling. If his sister is providing care then yes, I think morally he should contribute. If this means getting more life insurance so you are not left homeless then get more life insurance.