The necessity of planning for the unexpected.
Protecting Your Loved Ones’ Financial Future
Having a will and life insurance in place is crucial for safeguarding the financial stability of your loved ones after you’re gone. These two key elements provide peace of mind by ensuring that your family’s needs are taken care of and their future expenses are covered.
Ensuring Your Assets Are Distributed According to Your Wishes
By creating a will, you can determine how your assets and possessions will be distributed among your beneficiaries. Without a will, your assets may be subject to probate laws, which means the court will decide who receives what based on predetermined rules. Having a will allows you to express your desires clearly and ensures that your hard-earned assets go to the right people.
Providing Financial Support During Difficult Times
Life insurance acts as a safety net for your family, providing them with financial support when they need it the most. In the event of your passing, your life insurance policy can help cover expenses such as funeral costs, outstanding debts, mortgage payments, or daily living expenses. It offers a much-needed financial cushion during a time of grief, allowing your loved ones to focus on healing without worrying about their immediate financial well-being.
Planning for the Unexpected
Life is unpredictable, and unfortunate events can occur at any time. By having a will and life insurance, you are preparing for the unexpected. It allows you to outline your wishes and make provisions for your family, even if you’re not there to take care of them personally. It’s a responsible step towards securing their future and ensuring that they are provided for in your absence.
To Elaborate…
Video Transcription:
Hi, this is Mike Sheehan from FinancialProf.org. I wanted to take some time to talk about… Something that very, very few of us want to talk about. And that’s the day that we pass away. I’ve been in the insurance business for over 30 years. I’ve helped a lot of clients put together their life insurance plans, protected their retirement savings.
But the longer I’m in the business, the more phone calls I get of my clients that have passed away. And one of the common things that I experience with those is they are very flustered on what to do next. Obviously, no one is looking to pick that day. So for most folks, the day that that spouse passes away is very unexpected.
There are situations where someone has been ill for a long time, but even then, it’s still unexpected when that person passes away. So you would need to plan. It’s just common sense that you plan so that the surviving spouse, in a very terrible time, where their life is now turned upside down, that they are now not burdened with things that they said, I wish I would have done that.
Now I’m going to show you this. I’m just going to kind of flash it in front of me here. Okay, that is a sheet in a plastic. It’s got my wife’s name on it and it tells her exactly what to do, who to call when I pass away. And I say when because, you know, none of us are getting out of here alive. So… But it has where the life insurance policies are, who to call to help with that. Just everything that, you know, she needs to know just things that I do around the house that she’s not even aware of that need to be taken care of, like changing the furnace filter, you know, I mean, there’s things that, we each do in the house that we don’t necessarily sit down and discuss, it’s just done. But, I did this for the sake that she will have a smooth transition and not be burdened with what do I do next? And one of the areas that can get complicated, unfortunately, is. Contacting the life insurance company to file that death claim.
So, all of your life insurance policies, well, let’s go back to one. Know where your life insurance policies are, and make sure your beneficiary knows where your life insurance policies are. Let’s just say… You know, most folks have a primary beneficiary, which would be their husband or wife, and then some will go to the extent to have a contingent beneficiary, which for most folks would be their kids.
But the way it works is if you don’t have a contingent beneficiary, the life insurance company would go, it’s called “per stirpes”, it would just go to the next family member. And that’s where a will comes into play. And, I’m not going to get off on a tangent, but, with all of this, you should have a will and/or a trust, because that is going to dictate exactly how you want things to happen in the worst case scenario where both husband and wife die within the same day or within this short period of time. So anyways, you want to make sure that the beneficiaries are correct. I just talked to a client yesterday. She said, you know what, I need to change that. And I talked to her I try to follow up as best I can. And it’s been a few years and she said, yeah, I need to change those beneficiaries.
And again, that’s the easiest way for that policy to get paid out with the least amount of anxiety, is making sure the beneficiaries are correct. So you can easily, you know, you pull out your insurance policy, you tell your oldest child, whatever it is.
Here’s where my insurance policies are and they don’t have to be locked in a safe. If you’re doing that for protection of fire or whatever, I understand that, but they don’t need to be locked in a safe. There’s nothing that if somebody stole those, there’s nothing that they could do with them. They can’t access your cash value or anything.
So you want to put it in a file or somewhere where, the family members know where these papers are. And on each of those, there’ll be a phone number that you can call and usually they give you even the option. Are you, are you an existing client? Are you an agent? Are you filing a death claim?
You know, press three and you press it and then they understand, and they’re usually very, very helpful. I’m not saying usually they are very, very helpful. And they would ask for the date of death and the name and they would confirm yours and your social security number and the policy number and then they would start the paperwork.
Now, along with that, most. If not all funeral homes, one of the things that they will do will help you to request death certificates. And all insurance companies, pretty much all of them, will require an original death certificate. So you may get the paperwork from the insurance company in a week or so, but it could be four weeks, six weeks, eight weeks,
before you get the death certificate. So now you just have to kind of sit on that because there’s nothing more that you can do at that point. Once you get the death certificate, you continue to, you know, you file the paperwork with the death certificate. I always encourage you or recommend that you do it with a tracking number.
You follow up, make sure that they got it. Once they received it, then depending on the option you chose, As far as how you wanted the death proceeds and life insurance proceeds, you’ll get a check, so you can ask, and it depends on the company. Some companies will put it in a interest bearing checking account.
Some companies will just send you the check. But on the death certificate forms, they’ll give you the options. Frankly, I kind of recommend, Hey, get the check and be done with the insurance company, and then you can deposit it in, you know, wherever in your checking account. And again, this death proceeds is tax free, so there’s nothing you need to concern yourself as far as your taxes are concerned.
So depending on the size of the check. You may even open a brand new checking account on your own, but 📍 again, that would be something you could have that conversation with your agent who sold you the policy. So that takes care of that. So again, you’re looking at seven to 10 days before you get the paperwork, You fill out the paperwork, then you sit and wait for the death certificate, which again, could be four, six, eight, it could be 10, unfortunately, but it doesn’t prevent you from calling and saying, “Hey, what’s the status of that?” And the funeral home. I usually recommend this to to get maybe 5-6-7, maybe even 8 death certificates because your social security, life insurance, maybe the work life insurance policy. There’s going to be different things that you’re going to need to do that’s going to require a death certificate and most of them require an original, not a copy. So there’s that, now the next thing that you’re going to do is if you had a life insurance policy; You’re gonna need to change the beneficiary. So, whether it’s that same company or another you’re calling them talking to customer service, and asking them to send you the forms to update your beneficiary.
As well as if you have a will or a trust, you’re going to need to sit down with your with your attorney to update that will or trust. So those are some immediate things that you’re going to want to do. The biggest thing is, is having it laid out so that the surviving spouse knows.
I have some online accounts. My passwords, all of those kinds of things that we just take for granted. You want the spouse to know where that stuff is. I have some accounts online that I deal with that she really doesn’t know anything about. But I certainly it’s not that I’m hiding it. It’s just something that I’m doing, but I want her to be aware of that, especially if it’s something that generates income. The president of that company, who to call, a contact person, whatever the situation might be so that you can start the process to do whatever you need to do to get that transferred into your name. So again, it’s something that we can very easily put off. I mean, I’ve been in homes where a person will call me and they’ll say, “Hey, my spouse passed away. Where’s the life insurance policy?” I have no idea. You know, now we’re digging for a statement. We’re digging for something so that we can call the insurance company to get a copy, which again is taking time, when that happens. You want to have that done beforehand. So, like I said, I have a very simple form of sheet. I leave it right by my phone. You know, again, I’m not expecting of leaving here anytime soon, But who knows, my dad passed away at a very young age.
And he had a lot of things in order and which made it very easy for us to transfer, take care of everything we needed to do, for my mom. So again, pick that time, sit down, have that conversation. Find out what life insurance policies you have and where they are. And also, what are the coverage limits on that policy?
If it’s a term policy, it’s going to have a limit to it. If it’s a 20 year term policy and you’ve had it for 21 years, that policy may not be enforced anymore. And I’ll guarantee if you had a 20 year term policy and you’re probably around Year 18, maybe 17, you’ll start getting correspondence from the company saying, “Hey, your policy is going to expire in two years. If you want to continue it, here’s what it’s gonna cost you.” If you have a permanent policy, which would be a whole life policy or a universal life policy, again, know, what the cash values are. You’ll get statements every year. And if you don’t, you can’t find it, you can call the company and say, can I get a statement on my policy, which will give you the cash value amounts, it’ll give you, everything you need to know about the policy. But again, put those in a file, put those somewhere where, your respective spouse knows where your children know where they are. It’s very easy to grab those and to do what we need to do. Have the phone number of the local social security office.
You need to call social security. Again, that’s a whole other situation of what happens with social security, if you’re of that age and you’re taking social security, one of the things that people often forget about, it’s not a significant amount, but still it’s money that’s owed to you. Social security will pay out $297 in a death benefit.
You know, it’s $297, but you have to request that doesn’t happen automatically. And then certainly this changing over of the social security to the surviving spouse. That’s a whole other conversation that you would want to sit down with your agent, but the main point of this is just be prepared. This is nothing that takes a lot of time. but it’s going to make things very, very less stressful for your surviving spouse. So, if you’re at a loss and you want to talk to us, you can reach out to me at FinancialProf.org. That’s our website. There’s phone numbers on there of how to get ahold of us, and we’d be very happy to assist you.
So until next time, make it a great day.
