J Speir
Life Insurance Audit
What is a Life Insurance Audit? Most folks that have a life insurance policy typically put that policy in a file cabinet and forget about it. It is the rare person who pulls that policy out to refresh oneself on what the benefits in the policy are and is it still meeting one’s goals. When we meet with folks we review their current policies. We review the following:
- What life insurance company is servicing the policy. The company that originally sold you the policy may have been bought by another insurance carrier. We need to know who to communicate with in the event we need clarification/interpretation of the coverage in the policy or to file a claim.
- What is the death benefit amount. Is it sufficient? Is the policy primarily for final expenses, ie. funeral costs.
- Will the policy be in-force as long as you planned. For example; If someone purchased a universal life policy 20 years ago, it was originally illustrated with higher interest rates. Well, interest rates are at historic lows, the person is 20 years older, so the insurance is more expensive and the cash value in the policy has been used to cover the premiums. Thus the person receives a letter in the mail informing them that they need to add more premium to prevent the policy from lapsing. This comes as a surprise to the person if they have not been reviewing the policy regularly. We make sure we ask the company for an in-force illustration.
- Who are the beneficiaries of the policy? Are they current? Is there a primary and contingent Beneficiary? Too many times have I seen policies where the beneficiary is deceased and there is not a contingent named.
- Is there any cash value in the policy? This can be important for folks that need additional income or need funds to pay for long term care.
- Does the policy have a disability income benefit? Several years ago I met a gentleman that was disabled and he was not aware he had a disability benefit in his policy. We were able to trigger the benefit for him and receive retroactive payments.
- Does the policy have a long term care benefit? There are some policies that have a benefit that will cover some expense for home care, assisted living and nursing home care. This is important for us to be aware when we are doing long term care planning.
- Does the policy have a terminal illness benefit? If so, the benefit allows for a portion of the policy death benefit to be withdrawn in the event your doctor certifies you have 12 months or less to live.
It is human nature for folks to avoid the thought of death. However, as you can see a Life Insurance Audit can help you avoid the surprise of a lapse notice and make us aware of the benefits your policy may have to assist in retirement, long term care planning and after-life planning.
Long Term Care Planning
Are you prepared for the possibility of needing long-term careat some point?
Have you considered the effect long-term care costs will have onyour assets and estate?
Many people are surprised to find that Medicare onlycovers part of the costs of long-term care, and with costs of up to $5,000 per month or more, even a stay of a few months can have a devastating impact on their financial situation. This problem is compounded if a healthy spouse needs the use of these assets (especially the home). Unfortunately, the spend down of family assets and the eventual use of Medicaid becomes the end result. The problem is it requires that you have virtually no assets to qualify. This is the sad reality for many people. There are, however, solutions that may enable you to protect your savings & assets from the costly expense of Long-Term Care. Planning early is critical!
Retirement Planning
- Are you prepared for retirement?
- Will you have adequate income to support your retirement lifestyle?
- Are you aware of how IRA and pension distribution requirements will affect you?
Understanding the answers to these questions will allow you to focus your attention on building a sound financial strategy for a comfortable retirement. By planning early you are in control and can avoid the unpleasant surprises of not planning properly. We can help! Remember, retirement is just one phase of your financial life, and like the rest of your finances, it requires careful attention and planning. We will work with you to understand your ideal retirement life and create a plan to achieve this lifestyle
4 Stress Reducing Savings Ideas
- Emergency Fund — Do you have emergency funds on hand or do you rely upon credit cards to see you through rough patches? Credit cards are very costly and a reactive way to handle life’s many challenges. Begin to saving every pay period to get this fund replenished…or started!
- Your Retirement — You may not have enough cash at the moment, but putting aside money each week in a growth account can give you something to live on besides Social Security.
- Vacation Fund — 2 weeks on a Caribbean Island, Baja California, Paris or Tokyo are an expensive dream for some people. Put it on your calendar for 2014 and start saving for your ideal vacation today. Want to take a pricey safari junket? Add a few more years out and put more money aside each week to help you save right now.
- Fun Fund — Everyone needs a little bit of “fun money” to spend on things they normally wouldn’t buy for themselves at various times of the year. With money put in a dedicated account for that purpose, you can tap it guilt-free without thinking you’ve done something wrong.
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