Health and life insurance question, anyone seen this first hand

[GaDisneyFreak]

Say a man had a 100,000 life insurance policy on himself but had no health insurance what so ever. Then he goes into the hospital and runs up a say a 200,000 bill and then passes away. Could the hospital take all of that money leaving his widow and adult daughter with no money left at all.

 

[ilovemk76]

Say a man had a 100,000 life insurance policy on himself but had no health insurance what so ever. Then he goes into the hospital and runs up a say a 200,000 bill and then passes away. Could the hospital take all of that money leaving his widow and adult daughter with no money left at all.

I believe that life insurance is not part of the estate as long as a beneficiary is listed on the insurance.

They could get everything else he had, as they are part of his estate and all debt is paid out first.

 

[Shagley]

I think that since the life insurance would have the wife listed as the beneficiary, the life insurance money would go to her. Then it would be up to her to work with the hospital in regard to paying off the hospital bill. The hospital couldn't just take the life insurance money.

 

[ilovemk76]

Did the wife sign any paperwork with the hospital that she would pay the bill? I know when DH had his surgery, I signed that paper.

 

[akcire]

Say a man had a 100,000 life insurance policy on himself but had no health insurance what so ever. Then he goes into the hospital and runs up a say a 200,000 bill and then passes away. Could the hospital take all of that money leaving his widow and adult daughter with no money left at all.

Possibly. Technically the $200,000 bill is a debt to the husband and his estate. They could go after ANY asset he has, house, bank account, cars, land, etc.

If the life insurance is payable to the estate or two his wife will determine if the hospital can attach. If the man has no assets I would think there maybe some charity from the hospital, but it all depends.

Of course the biggest question is how would the hospital know there was a $100,000 insurance policy? Also has the wife been dodging the bills because he is dead?

When my husband's grandma died (she lived with us) we got calls for a while for a hospital bill. I paid it just so they would stop calling (less than $200) even though her estate was broke (had to subsidize the funeral costs too). For me it was easier to pay it than, keep getting phone calls after I initially told them she was deceased. If it had been more I wouldn't have paid, but ultimately grandma did receive a service.

 

[need2cruise]

No, it is paid to the beneficiary on the policy, unless they listed "the estate of" as the beneficiary.

 

[eliza61]

Generally no.
As others have said, the life insurance will go to the beneficierys (sp).
If the house was in both their names and they had a will she can probate the will and have the house deed transfered into her name.

 

[seashoreCM]

Usually the surviving spouse gets to keep some of it. But usually other dependents do not get to keep any of it.

Usually a surviving spouse or certain dependents cannot be evicted from a jointly owned house. In some cases the spouse gets the house (but at his/her passing the house may well have to be sold to pay off his/her own debts).

But in some cases a life insurance policy has to be cashed in early to pay the holder's debts.

 

[eliza61]

Usually the surviving spouse gets to keep some of it. But usually other dependents do not get to keep any of it.

Usually a surviving spouse or certain dependents cannot be evicted from a jointly owned house. In some cases the spouse gets the house (but at his/her passing the house may well have to be sold to pay off his/her own debts).

But in some cases a life insurance policy has to be cashed in early to pay the holder's debts.

Ouch. Never, ever, (can't put in enough never's ) do this. Life insurance is just that, insurance when there is loss of life. If there is a beneficiery such as a spouse, legally there is nothing the hospital can do to take that money.

I really try to be a responsible person and it would take a lot for me to say "don't" pay off a debt I occured but I am recently a widow, my wonderful dh of 25 years lost his battle with luekemia. Because he was a wonderful man his life insurance will allow me to continue to live the life we planned on. My children will finish college and I will be financially secure for the rest of my life. Would I trade it all back in a nanosecond for 1 more day with my boo. YES!! but now that I am the sole responsible parent for my kids sorry I would never ever use my life insurance to pay any bill.

 

[ilovemk76]

Ouch. Never, ever, (can't put in enough never's ) do this. Life insurance is just that, insurance when there is loss of life. If there is a beneficiery such as a spouse, legally there is nothing the hospital can do to take that money.

I really try to be a responsible person and it would take a lot for me to say "don't" pay off a debt I occured but I am recently a widow, my wonderful dh of 25 years lost his battle with luekemia. Because he was a wonderful man his life insurance will allow me to continue to live the life we planned on. My children will finish college and I will be financially secure for the rest of my life. Would I trade it all back in a nanosecond for 1 more day with my boo. YES!! but now that I am the sole responsible parent for my kids sorry I would never ever use my life insurance to pay any bill.

I am sorry to hear of your loss.

 

[RitaE]

Ouch. Never, ever, (can't put in enough never's ) do this. Life insurance is just that, insurance when there is loss of life. If there is a beneficiery such as a spouse, legally there is nothing the hospital can do to take that money.

I really try to be a responsible person and it would take a lot for me to say "don't" pay off a debt I occured but I am recently a widow, my wonderful dh of 25 years lost his battle with luekemia. Because he was a wonderful man his life insurance will allow me to continue to live the life we planned on. My children will finish college and I will be financially secure for the rest of my life. Would I trade it all back in a nanosecond for 1 more day with my boo. YES!! but now that I am the sole responsible parent for my kids sorry I would never ever use my life insurance to pay any bill.

I'm really sorry to hear about your husband Eliza. My best thoughts definitely go out to you and your family.

I won't agree with your "never" however. I have seen clients who obtained life insurance mainly to protect kids and house. Twenty years later the kids are grown and the house is either paid off or mostly paid off and the protection need just isn't there anymore. And in many cases the life insurance benefit pays for vital medical care.

Settlements of debt can vary from state to state. There are situations where a wife becomes responsible for debt acquired by the husband prior to death. In that case it is not so much that the life insurance is taken to pay the medical debt, it is that the wife is responsible for the bill payment and must use the insurance proceeds to pay the bills.

 

[eliza61]

I am sorry to hear of your loss.

I'm really sorry to hear about your husband Eliza. My best thoughts definitely go out to you and your family.

I won't agree with your "never" however. I have seen clients who obtained life insurance mainly to protect kids and house. Twenty years later the kids are grown and the house is either paid off or mostly paid off and the protection need just isn't there anymore. And in many cases the life insurance benefit pays for vital medical care.

Settlements of debt can vary from state to state. There are situations where a wife becomes responsible for debt acquired by the husband prior to death. In that case it is not so much that the life insurance is taken to pay the medical debt, it is that the wife is responsible for the bill payment and must use the insurance proceeds to pay the bills.

Thanks guys. I really appreciate that.

LOL, RitaE I can't believe I forgot my first rule of thumb. Never say "never".

So you are absolutely right every situation is unique. I'm pretty typical in that we still had a mortgage and 2 kids in college. Dh was the primary wage earner, so I do thank God that we took the time long ago to have wills done, power of attorneys and have life insurance. So many people don't do it, especially when they are young. Since the best description of my emotional and mental state is "rollercoaster ride", I simply can't imagine the horror of having to also worry about losing the house and how to pay for college tuition.

NJ is fairly simply (so far). My dh had started his own business with a partner that was incorporated and they had business insurance covering death of a partner so I don't have to worry about any bills from business expenses.
He was a patient at University of Pennsylvania hospital and they have already told me that I am not responsible for any remaining bills not covered by health insurance. They will submit a bill to his estate, if there will be one but they clearly stated that I was not responsible nor did I have to use any life insurance to take care of his medical bills, my attorney also confirmed.

Let me also add that we both had/have medical insurance through our jobs so I am probably playing "monday morning quaterback"

His credit cards (he had 2 personal ones not joint) told me the same thing when I canceled.

 

[manning]

Ouch. Never, ever, (can't put in enough never's ) do this. Life insurance is just that, insurance when there is loss of life. If there is a beneficiery such as a spouse, legally there is nothing the hospital can do to take that money.

I really try to be a responsible person and it would take a lot for me to say "don't" pay off a debt I occured but I am recently a widow, my wonderful dh of 25 years lost his battle with luekemia. Because he was a wonderful man his life insurance will allow me to continue to live the life we planned on. My children will finish college and I will be financially secure for the rest of my life. Would I trade it all back in a nanosecond for 1 more day with my boo. YES!! but now that I am the sole responsible parent for my kids sorry I would never ever use my life insurance to pay any bill.

And, unless spouse agreed to pay any bills to the hospital, the bill is paid out of his estate. Any outstanding debts left over is forgiven.

 

[bedogged]

Say a man had a 100,000 life insurance policy on himself but had no health insurance what so ever. Then he goes into the hospital and runs up a say a 200,000 bill and then passes away. Could the hospital take all of that money leaving his widow and adult daughter with no money left at all.

No, life insurance goes to the person who is listed as the beneficiary and is usually tax free. It is not part of his estate. Depending upon how large his estate is, I think around $60,00 or more, It will have to be probated. Part of probate is that you have to advertise for creditors for a period of time. His assets are liquidated and go into a probate account. A Personal Representative is appointed for the probate. The Personal Representative pays the creditors from the probate account.

In regard to the house, most married couples title their house where when one dies the other becomes full sole owner. If that is the case, it would, in my opinion, not be part of the estate so would not have to be probated. Please consult a lawyer who is experienced in this area for more information

 

[RitaE]

And, unless spouse agreed to pay any bills to the hospital, the bill is paid out of his estate. Any outstanding debts left over is forgiven.

In a Community Property state a spouse doesn't have to sign or agree in order to be held liable for a spouse's debt incurred during the marriage.

 

[arihillfarm]

So what types of things would belong to the estate of the deceased if s/he were married? Clothing, books, cars titled only in the deceased's name? I was under the assumption that everything not specifically left to someone else would go to the surviving spouse.

-Astrid

 

[here757]

depends on the state law..

So what types of things would belong to the estate of the deceased if s/he were married? Clothing, books, cars titled only in the deceased's name? I was under the assumption that everything not specifically left to someone else would go to the surviving spouse.

-Astrid

 

[here757]

in our state... "VA" the will is only read if both husband and wife has passed. if one goes before the other.. then survivor gets all.. (house, money etc)

i own a business. and written into my contract i can sue the estate of XXXX for balances due and so forth..

i can not expect an insurance company to pay the account. but the survivor.. doesnt matter where they get the money.. (luckily i have never been there or done that)

 

[robsmom]

in our state... "VA" the will is only read if both husband and wife has passed. if one goes before the other.. then survivor gets all.. (house, money etc)

i own a business. and written into my contract i can sue the estate of XXXX for balances due and so forth..

i can not expect an insurance company to pay the account. but the survivor.. doesnt matter where they get the money.. (luckily i have never been there or done that)

Are you a lawyer in VA? I don't think this makes sense. You don't need to probate the will if all is going to the spouse, but this does not mean the will is not read as there could be recipients other than the spouse and there could be a need to probate. I don't think there is any state that would legally allow a spouse to not read and thus ignore the will of their spouse.

 

[eliza61]

Are you a lawyer in VA? I don't think this makes sense. You don't need to probate the will if all is going to the spouse, but this does not mean the will is not read as there could be recipients other than the spouse and there could be a need to probate. I don't think there is any state that would legally allow a spouse to not read and thus ignore the will of their spouse.

I think it could depend on what assets you are talking about. For example, I have not probated my dhs will yet but all the insurance has been submitted a long with his pension and 401 info. I did not need to probate the will for that. Since the house and cars were in both names, there is no big rush for me to probate the will. Not sure if there is some regulation saying I have to have it done within a certain time but I'm in no rush.