Posts

7 Steps to Filing a Life Insurance Death Benefit

/0 Comments/in , , /by

The loss of a loved one is always a difficult and stressful time. In addition to going through the stages of grief, we’re often faced with making difficult decisions regarding the deceased’s burial. Bills must still be paid and, oftentimes, financial and legal issues must be addressed.

Fortunately, you and your loved one set up a life insurance policy to help you get through this distressing time. While a part of you might feel uncertain about filing a death benefit claim, keep in mind that the purpose of this policy was to help you cope as you get accustomed to this new normal. The expenses that emerge shortly after a loved one’s death are often significant. Surprisingly, many individuals abandon their loved one’s life insurance policy, leaving over $1 billion in unclaimed life insurance benefits. Don’t put you and your family through additional unnecessary turmoil. File for the benefits due to you.

While the specifics vary slightly from company to company, below are the next steps you must take to file a claim.

1) Find a Copy of the Policy

Hopefully, you’re aware of where the deceased’s life insurance policy is located. If not, nightstands, bookshelves, filing cabinets, and desks are the most common places for storing important papers.

Tip: In many states, safety deposit boxes are sealed immediately after one’s death. To avoid settlement delay, encourage loved ones to avoid storing their policy in a safety deposit box.

2) Check to Ensure There Aren't Any Other Policies

Many employers offer life insurance, accidental death, and dismemberment riders as part of their benefits package. Check with your loved one’s human resources to see if there are any additional policies you weren’t aware of.

Surviving family members are also often entitled to a small burial benefit (or monthly survivor benefits) through Social Security. Additionally, if your loved one was traveling when he/she passed, check with a representative from the credit card that was used to make travel arrangements.

3) Notify the Agent

As soon as you’ve located the policy paperwork, you’ll want to notify the insurance company. If an independent agent sold you the policy, consider contacting them directly. She can act as an intermediary with the insurance company, ensuring the process goes smoothly. If the deceased purchased a group life policy through their employer, the human resources department can assist you in filing your claim.

4) Obtain Copies of the Death Certificate

A certified copy of the person’s death certificate is required to file a death benefit claim. This can be obtained within a few weeks of their death, through the vital records department in the state in which he/she resided. The funeral director can assist you in acquiring this information.

5) Request Claim Forms From Insurance Company

Request a copy of the claim forms needed to file for benefits. Review the paperwork carefully and be sure to gather any additional paperwork that may be required.

If you’re unable to fill out the forms or simply do not understand portions of the paperwork, ask your estate attorney or insurance agent for assistance. Each beneficiary will have forms to fill out and sign.

6) How Do You Want Benefits to Be Paid?

There are typically multiple payment options available to beneficiaries. Check with your financial advisor, insurance agent, or estate attorney regarding these options. They can help identify the best possible payout for your unique situation.

7) Submit Completed Forms to Insurance Company

Return your completed forms, along with a certified copy of the death certificate and any other required paperwork, via certified mail or with a request for return receipt. Most states require life insurance benefits be paid within a certain amount of time, but the number of days vary from a few weeks to a few months.

If you’re unsure if your loved one had a life insurance policy, MIB’s policy locator service may help you find the information you need. The American Council of Life Insurers (ACLI) is also a great resource for finding missing information.

8 Ways to Get Financially Fit in Your 40’s (Part 2)

/0 Comments/in /by

For part two in our series on building your financial future, we will discuss some key strategies for ensuring you aren’t left in the lurch come retirement time. With just a few money maneuvers, and time for growth, you can get your cash working for you. The key is to start soon and contribute often. But where should you put your hard earned income and what added protections can you enact to keep your investments safe?

5) Protect Your Income With Disability and Life Insurance

What would you do if you were unable to work for one month? Some families would be ok, while others would crash and burn halfway through the month. Regardless of how much money you have set aside for a rainy day, it’s always good to add a little extra cushion for peace of mind. And, the more your family grows, the more important it becomes to secure your income in the event of a disability.

No one ever really believes the unthinkable could happen to them. But, according to the Council for Disability Awareness, a 35-year-old male in good health has a 21% chance of being out of work for at least 3 months due to a disability. A healthy female has a 24% chance of becoming disabled short-term.

The best way to secure your family’s future financially is to invest in life insurance and disability insurance. Many employers offer disability insurance for a very reasonable premium. If it’s offered to you, take it.

Life insurance, however, is typically best purchased as an individual plan. Employer-based policies are limited in coverage and you can’t take it with you when you leave the company. An experienced agent can help you identify your family’s unique life insurance needs and assist you in finding an affordable policy.

6) Start a College Fund

If you have children, the necessity for a college savings fund will more than likely rank fairly high on your list of financial to-dos. Education is and always will be a critical tenant of success and we all want the best for our kids. By starting early on a savings plan, you will contribute a smaller amount overall in relation to your end results.

7) Construct Your Financial Dream Team and Discuss Regularly

Many financial advisers recommend knowing your worth and having it in writing. Sit down once a year and write a net worth statement. Review your annual statement line by line with your financial planner. Come up with a financial strategy and update it annually, checking to see how far you’ve come and how far you have left to go.

It’s also important to consult with your spouse or significant other once or every other month to ensure you’re on the same financial path. Consider your expenditures and where you can better allocate your funds. This can also be a chance to make reminders about upcoming annual bills and renewals, schedule payments or delegate responsibilities. Planning ahead, even a couple months, can prove beneficial for both short and long term financial stability.

8) Retirement Savings Begin Today

It’s never too early to begin saving for your retirement, as the level of financial freedom you’re afforded in your golden years directly correlates to what you’re putting aside right now. It can be a challenging endeavor, though, to knowingly squirrel money away for the future when it feels as if there are so many things to spend money on now. The key comes from following your financial plan and realizing that the payoff will far exceed the current wants.

A successful method for actualizing the money you should be saving is considering what percentage of your income you’ll be able to replace annually or monthly. A successful ratio would be in the 80-85% range. In other words, your savings should be able to cover 85% of your monthly salary. You gain a bit of ground because you can factor out your previous retirement contributions.

Overall, the key to future financial security is to invest, protect, and stick to the plan. Even if you waiver at times, make it a goal to make up any lost ground as soon as possible and continue reaching your regular goals. It can be a challenge, but also becomes a great reward. And, once you are following a successful plan, you won’t miss the nominal amounts you’re diverting. For more information on achieving financial freedom or if you missed Part One in our series, visit our website today.

The Downside to Purchasing Life Insurance Through Your Employer

/0 Comments/in , /by

If you’ve started a new job recently, or it’s open enrollment season at the office, you’re probably facing some tough decisions regarding your family’s insurance. Many organizations now include a life insurance policy as part of their employment package. The cost is minimal, or often free, making it appear they’re offering you a really great benefit.

If your employer provides a life insurance policy to you for free, take it. They’ve made the process so easy – all you have to do is sign up. No medical exam and no long, drawn out medical forms to fill out. You often even have the option of having your group life insurance premium drawn straight from your paycheck, so you never really even miss the money.

Studies indicate this is the most popular life insurance investment amongst U.S. citizens, with group insurance plans providing $8.2 trillion of protection in 2014 alone. With more than 41% of life insurance policies purchased through a group life plan, it’s obvious that many consumers have weighed their options and feel that this is the best solution. While we agree you should take the policy, it’s important that you understand the pros and cons going into it, so your family has the financial stability necessary should the unthinkable happen. Let’s begin with the pros.

Pros of Buying Life Insurance Through Your Employer

There are 3 advantages to purchasing life insurance through your employer: price, acceptance, and convenience. To better understand the first, let’s first examine the concept behind insurance.

Insurance is defined as a pooling of risks. Individuals who aren’t in a financial position to take on a specific risk, transfer said risk to the insurance company. In this case, we’re referring to life insurance and the potential death benefit payout should a catastrophe occur.

For group life insurance policies, the pool of risk focuses on the insured workforce. The life insurance company evaluates the overall health of each individual and determines an average rate based on their findings. So, if you’re a non-smoker who is in great health, you’ll still be paying the same premium as your colleague who is the same age, with multiple health issues. If you’re offered a policy through your employer and you have serious health concerns, you may qualify for a much better rate through your group plan than you would on an individual policy. This is something that should be examined on a case-by-case basis, as everyone’s situation is unique.

Speaking of health issues, acceptance is the second pro to purchasing a group life insurance policy. You will likely be required to fill out a detailed questionnaire, but no medical exam is required for group plans. So, not only will your premium be lower, but eligibility is a breeze, making this the easiest and most affordable option for those with any kind of medical concerns.

Even for the simplest of insurance policies, investing in life insurance is a process. It takes time to shop around, determine the coverage you need, and understand the different options available to you. Purchasing a group policy removes all the guesswork. You may have some options regarding coverage amount but, other than that, the decisions have already been made for you. If you’re looking for a quick and convenient policy, purchasing one through your employer is probably your best option. Just be sure and understand the limitations so your family isn’t left without the protection they need.

Cons of Buying Life Insurance Through Your Employer

While the convenience of buying life insurance from your employer may seem tempting, there are some additional factors you should consider before making your final decision. Let’s examine the drawbacks to purchasing a group life insurance policy.

A recent study conducted by the U.S. Bureau of Labor Statistics indicates that the average number of years workers stay with their current employer is 4.2 years; and this number is expected to decrease in the coming years. It’s important to take this into consideration when purchasing a group policy, as your policy will cancel once you’ve moved on to the next stage in your career. If you intend for this to be your primary source of life insurance support, you run the risk of being uninsured if you retire, are let go, or change companies.

As mentioned earlier, if you have any serious medical concerns, a group life insurance policy might be your cheapest and safest option. If you’re a nonsmoker and are in good health, however, this is generally not the case. Before accepting the group life plan, speak with your insurance agent to review your options – they can likely help you save a considerable amount of money purchasing a policy outside the workplace.

Most group life insurance policies renew every 1 to 5 years. At the time of expiration, the insurance company will reexamine the risk pool and adjust rates accordingly. If you’re in the market for a more consistent policy premium, you’ll want to consider purchasing your own individual term policy, where the premiums are level and the policy term is longer.

It is typically recommended that consumers purchase policy coverage equal to 5 to 10 times their current annual income. Most group insurance plans limit employee coverage amounts to between 2 and 3 times their annual salary, leaving individuals underinsured.

While opting for group coverage sounds like a great benefit on the surface (and it is for many), it’s important for you to consider both the pros and cons before making your final decision. Speak with a qualified insurance agent to help you weigh your options. Make sure you understand the policy’s limitations and what the financial impact will be on your family upon your death. If you’re going to spend the time and money protecting your family, you might as well make sure your hard-earned dollars go as far as possible.