While it is not necessarily a popular topic, understanding some life insurance basics is essential.  This is because there are many uses of life insurance throughout our lifetimes. Fortunately, there is a type of insurance that matches various needs.

For example, insurance may be needed for:

  • Liquidity at death to pay bills, pay taxes, replace lost income
  • Liquidity at death to complete business agreements such as a buy-sell agreement in a succession plan
  • Liquidity at death to equalize an inheritance
  • Liquidity during life to pay for long term needs or chronic illness

Once the need for the insurance is clear, then it is important to determine which type policy offers the necessary features/benefits:

  • Is a single life policy best or is it a survivorship policy (policy based on two lives)?
  • Is there a measurable term of years for the insurance need?
  • Is it better to have a fixed death benefit or an increasing one?
  • Does it need a rider to protect against disability, chronic illness or long-term care?

Policy ownership is also important:

  • Should the proposed insured own the policy?
  • Should a trust be the owner?
  • Should another person own the policy?

During policy review, we often find policies with named beneficiaries (such as minor children) who cannot legally receive the proceeds.  What happens then?

During policy review we also have found a special needs child named as beneficiary.  This may unintentionally cause the child to be ineligible to receive other benefits for which (s)he could qualify.

This leads to important action and opportunities for you to consider and share:

  1. Review all existing life insurance policies to be sure you have the proper type of coverage
  2. Review all existing life insurance policies to be sure you have the proper owner
  3. Review all existing life insurance to see if the original need still exists
  4. Review all existing life insurance policies to be sure you are not paying too much
  5. Review all existing life insurance for proper beneficiary designations

This is obviously a complex process; please contact us and we will provide a comprehensive review of your existing insurance.  This complimentary, objective review is completed through an independent service.  You and we receive a comprehensive report which either confirms “everything is OK” or suggests appropriate next steps.  Based on our past experience, this is an extremely valuable service which results in providing peace of mind for all.

Barb Culver