Housekeeping
How often should Life Insurance be reviewed?
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One true constant about life is change. And change requires vigilance. No life insurance plan, regardless of how carefully crafted, can remain effective without monitoring. Here are a couple of real life examples that highlight first the need to understand ownership and beneficiary designations, and to review your plan at least once a year.
Example 1 – When James first obtained coverage, he was a young bachelor with a small salary. A needs analysis showed that a $100,000 policy would suffice at the time. Ten years later when James suddenly died in a traffic accident, $100,000 did not begin to cover James college debt for medical school, which his wife had co-signed for, nor their $385,000 mortgage.
Example 2 – When Mary died, her sister discovered much to her dismay that Mary’s husband George, who preceded her in death by several years, was still her only beneficiary. Several months after Mary’s sister paid for Mary’s funeral, Mary’s daughters, not her sister, finally received a check from the insurance company after a complicated and heavily regulated process.
Example 3 – Dorothy secured a life insurance policy on her loving husband the year their firstborn arrived and has religiously paid the premiums on the policy since inception, even after the divorce a few years ago. She figured there was still a need since the children were still with her and her ex husband still provided child support. The one thing she missed was that her ex husband was designated owner of the policy in the application, and can surrender the policy for its cash value and change beneficiaries, often without even notifying Dorothy.
Example 4 – Since no one was specifically designated owner of the policy when grandpa applied for a policy for Jennifer, per the policy provisions Jennifer became the owner of the policy at age 18. A couple of years later Jennifer decided to surrender the policy for its cash value.
Even though insurance companies do not typically recognize beneficiary designations in a Will (they go by beneficiary designations clearly documented with the company through company forms), your beneficiary may appreciate the clear instructions and legal privileges that a will can provide in regards to child custody, property allocation, etc. Check out this automated will generator at FreeWill.com.
***This article expresses the views held here at StrongBox, not those of any insurance carrier represented by the author.
About StrongBox Insurance
Our Mission at StrongBox is to help our customers plan intelligently for continuously improved financial health, to protect their most valuable assets, and to provide for their loved ones even in the worst of circumstances.
Each person’s mindset, situation, and circumstances are unique, and so is our approach to each customer. No matter your current situation, we can provide you with profound insight on the options available to help you design an affordable and effective plan to better position yourself and your family in facing life’s surprises with confidence.
According to LifeHappens.org, more than half of Americans think life insurance costs 3x or more than it does, and sure enough, more than half of americans have no life insurance. Please fill out a Quote Request or contact us via phone or email at your convenience, we will be happy to help. You may be gladly surprised about the actual cost of our life insurance solutions.
We are currently focused on solutions through life, accident and cancer insurance products, and anticipate health supplements and property and casualty products to become available in the next year or so.
Life insurance applications are offered through StrongBox Insurance, or through its designated agent only where licensed and appointed. Currently licensed in AL, AR, AZ, CA, CO, CT, DE, FL, GA, IA, ID, IL, IN, KS, KY, LA, MA, ME, MI, MN, MO, MS, MT, NC, ND, NE, NH, NJ, NM, NV, NY, OH, OK, OR, PA, SC, SD, TN, TX, VA, VT, WA, WI, WV and WY. Not currently licensed in MD, RI, or UT.
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