Trustee & Really Expensive Term Life Insurance

[debee]

The breadwinner in our house has an incurable medical condition so term life insurance is crazy expensive. He's not terminal, just chronic. Even a small policy - 4x his annual salary - will cost us over $300 per month. It is something we really want because we have small kids.

Any idea how it would fly by the trustee?

(Also, we have really high medical expenses for rx and equipment so it will be ovious to the trustee that we are a family with medical issues.)

[ccsjoe]

debee, as long as it can be proven, you will be ok. I believe you are getting an attorney if I recall. On the means test, there is a line item for medical expenses above the IRS limit, and on J there is no limit as long as actual numbers are used & justified if questioned.

[tcreegan]

Hi debee,

I second what Joe posted, and the life insurance is allowed if it is term life insurance (your case) under "other necessary expenses" on the means test, not sure where it goes on Sched J but it is an allowed expense.

As to the amount, both the BK code and IRS standards are equally vague..."reasonable" You certainly have extraordinary circumstances to justify it, but a local lawyer familiar w/ local trustees would be the place to go.

Good luck w/ everything,

Tom in Colo

[blockhead]

I'm paying $200 a mth for term and no one (not even the UST who audited the case) blinked an eye - so you should be fine