I was not sure at first why my client really needed life insurance. He was 46, not married and he had no children. He was not buying a house or taking on debt of any type. He was not a business owner who needed life insurance for business reasons. He had a good paying job and was consistently saving for his retirement. It was not the typical “life insurance buyer” profile.
Then he told me about his older sister Betty who lived with him. Betty was 12 years older than my client and was born with autism. My client was very proud of his sister. Despite her handicap, (Betty could not read, write, or count money) she is physically able to work and has held the same job for the last 30 years. She works 35 hours per week in the kitchen of the local private country club. She takes the train to and from work every day. In fact, she is the longest standing employee at the club!
My client was concerned about Betty’s financial security though. She would be okay as long as my client was alive and well to help her out. But what if Betty outlived him? Would there be enough money left behind to provide for her care?
In the end, my client set up a trust and bought a life insurance policy to fund the trust upon his death. This way he could still continue to pay for his sister’s financial support in case he died before her.