If a life insurance policy was taken out on you by a grandparent as a gift to pay for college, is there any legal recourse if the policy is canceled?

UPDATED: Jan 1, 2015

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If a life insurance policy was taken out on you by a grandparent as a gift to pay for college, is there any legal recourse if the policy is canceled?

Grandparent is now deseased so we’re just learning it was terminated.

Asked on January 1, 2015 under Estate Planning, New York

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

The question is, *why* was it terminated? If, for example, it was terminated because premiums stopped being paid for it, then you would not have recourse: 1) not against the insurer, since they are allowed to cancel or terminate a policy once premiums are no longer paid; and 2) not against the grandparent's estate, because there was no obligation on the grandparent to keep paying the premium--since this was a gift, not something you'd paid for or otherwise provided consideration--the grandparent could have stopped paying at any time, and if the grandparent was not obligated, the estate would not be, either.


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