Stuart A. Bronstein wrote:
- quote -

That's what I had hoped/guessed, so thank you for confirming
it.

- quote -

True, that could happen. But to make it totally bulletproof
would require a trust etc., and cost money! The insurance
itself, is just $135/year, for 10 years, for 250K term,
10-year level policy, so creating a new trust document may
not be economical.

- quote -

I am not sure if a foreign insurance company sell insurance
on MY life (US citizen, US resident), to my parents? In
many countries, the insured is required to be a citizen of
that country. And we are talking a developing country.

I am not even sure it will work even in developed country:
would a Canadian domestic insurer write life insurance on a
US resident, with benefits payable to a Canadian? I doubt
it.

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deja_bhoot2000[at]yahoo.com wrote:

- quote -

Yes, that normally is the way it works.

- quote -

That could be a lot harder. There are several concerns,
including the two of you dying in a common accident, which
might throw some or all of the insurance back into your
estate.

- quote -

I don't imagine that this should be a problem. But why not
just get an oversees insurance policy and bypass the whole
problem?

Stu

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My parents are retired, live overseas, and are NOT US
citizens. I contribute about 10K to 15K to them each year,
for their retirement expenses (my budget is able to handle
this -- see footnote below). As such, if I were to pass away
tomorrow, I would like them to receive about 200K from my
estate. My parents' remaining life expectancy is about 12
years.

After some discussions, and reading, it appears that buying
a 15 year term policy for 200K or 250K would be an
inexpensive way to insure this. If I am alive, I can keep
contribuing to my parents; if I am dead, they get the
proceeds from life insurance.

WITHOUT creating a trust, will the following solution work?
(a) Person insured: Me
(b) Owner of the policy: My wife
(c) Beneficiary of the policy: My father (primary); my
mother (contingent)

By "work", I specifically mean three things:
(a) proceed NOT subject to income taxes in US;
(b) proceeds NOT subject to estate taxes in the US; and
(c) insurance company willing to pay an overseas
beneficiary. My parents DO NOT have US social
security numbers (since they are not citizens or
residents). Will this create a problem in designating
them a beneficiary?

Thank you for your suggestions, comments and advice.

Bhoot Nath

Footnote: To avoid a thread diversion about taking care of
ourselves first, I provide the following additional
information. My wife and I are both US citizens, around age
40, with two minor children. Our own finances are in good
shape, with life insurance, disability, retirement,
children's education, etc. all on track. At age 40, we have
accumulated for about 12 to 15 years worth of retirement
expenses (including inflation impact). We hope to reach the
"critical capital" in another 5 to 10 years -- critical
capital meaning, enough savings such that a 4% withdrawal
rate, adjusted for inflatation, would be sustainable for
ever (i.e., could choose to retire, if we wanted). Our
assets are in mutual funds, inside and outside 401ks, some
DRIPs, some bonds, emergency cash, etc. No debts, except a
mortgage which is less than 30% of the home value.

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