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Ask the Life Insurance Expert

Can a life insurance company send 17-year-old a check in his or her name?

It’s highly unlikely a life insurance company would write a check to someone that is only 17 years of age.

In general, life insurance companies must wait which of the following occurs earliest:

  • The minor reaches the age of majority, which ranges from age 18 to 21 depending upon applicable state law.
  • The date that a legal guardian of the minor’s estate has been appointed by a court.

Having a relative who recently went through the guardian-appointment process, I can tell you it can be both timely and costly. And, a legal guardian does not just give a 17-year-old the life insurance money but instead will control the money for the minor until he or she reaches the age of majority.

Due to the obstacles a minor runs into as a beneficiary to a life insurance policy, it’s advisable to look at alternative ways in which he or she can receive the money.

One way is to set up an account for the minor at a bank.  An adult custodian named by the parents will control and manage the minor’s assets until the minor reaches the age of majority.  This is allowable under the Uniform Transfers to Minors Act (UTMA) that is in force in all states but two.  South Carolina and Vermont rely on a similar Uniform Gifts to Minors Act (UGMA).

Another way is to set up a trust for the minor.  A trust is more structured than having the money go into a UTMA account.  You set up the trust for the minor, select the trustee and define the terms under which the monies from the trust can be distributed and used.  Read “Life insurance trusts for child beneficiaries” for more detailed information.

Last updated: May. 23, 2014