Can your life insurance company take advantage of you?

Can your life insurance company take advantage of you?

Recently, I watched a 60-minute news story about how some of the largest life insurance companies don’t pay benefits even when they know the policyholder has died. Insurance companies claim that it is up to policyholders’ beneficiaries to contact the insurance company and to file a claim in order to collect whatever death benefit may be due them. But if beneficiaries are unaware of the policy, they don’t know to file a claim. Do you want to know another scary fact? The news reported that on some whole life insurance policies, even when the insurance company knew the client was dead, they still deducted the monthly premiums from the client’s account. So, what is the point of paying years of insurance premiums when your family may not collect the death benefit? This is just another example of why it pays to be organized with your estate planning. After I draft my clients’ estate plans, I encourage everyone to make a list of all accounts that are in their name and keep a copy with their estate planning documents. That way if something happens, the executor or trustee knows where to look and what companies to contact. For one reason or another, many people are afraid to tell their friends and family members exactly what their estate planning documents say. You really do not have to tell everyone everything. At a bare minimum, you should tell the person whom you have listed as trustee or executor of your estate where are your estate planning documents located and how they can access them. There is no point for you to spend...
How to protect your family with no savings?

How to protect your family with no savings?

When sitting down with concerned parents, one topic that often arises: How do I protect my family if I have no savings? If you do not have a lot of savings in the bank but are concerned with, or just want to make sure that your family is taken care of (financially), life insurance could be the answer. You have insurance for your car, you have insurance for your house, and you have insurance for your property, but what about your most important asset, your life? I do not sell life insurance but I can tell you what I learned while shopping for life insurance after having my first child. First, there are multiple types of life insurance. The two most common types are term life insurance and whole life insurance. Of these two types, term life will be your much cheaper option. With term life insurance you can get a large policy, 1 million dollars or more (depending on your age and health factors) for around $50 a month. This type of insurance is very simple. You pay your monthly fee for every month for the length of the term that you choose and once you hit the end date of the insurance, your policy cancels. Whole life insurance is a policy that you could have for the remainder of your life. This type of policy has many benefits. You can actually borrow money against the policy, or at a certain point if there is enough money in your account, you will be able to stop making contributions but your policy will stay intact. The only downside with...