Author: Sean Drummey

Ohio treasure hunt for lost life insurance policies

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April 28, 2011

12:57 PM

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Estate Planning

If you had a relative who lived in Ohio, perhaps they left you some life insurance money that you didn’t know about.   The easiest starting point is to type in your name in Ohio’s Division of Unclaimed Funds.

A life insurance carrier may have unclaimed money where they don’t know the policyholder has died or cannot locate the beneficiaries. Ohio’s Department of Insurance has a program to help find missing life insurance policies.  Ohioans with questions on life insurance may call their toll free consumer hotline (800) 686-1526.  Continue reading “Ohio treasure hunt for lost life insurance policies” →

Make Sure Your Life Insurance Claim Gets Paid

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April 27, 2011

10:39 AM

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Estate Planning

MetLife is being probed for not paying claims in California allegedly for policyholders they knew to have died, but no claim was made by the beneficiaries.  John Hancock recently settled with California over the same issue, which I wrote about a few days ago.   Expect more, as the Wall Street Journal reports:

The news comes as authorities in 35 states are looking at whether nearly two dozen of the U.S.’s most prominent life insurers are failing to determine if policyholders have died, and aren’t turning unclaimed funds over to states in a timely fashion.

This is a very positive development for policyholders, since carriers will be compelled to be more proactive in finding beneficiaries.  But given some beneficiaries are unaware of the life insurance policy, have died or moved away, many will still be unpaid.  The state will be the beneficiary of unclaimed money left in limbo.

Lessons for life insurance owners

Make sure your beneficiary names and addresses are up to date.  You may contact your carrier’s customer service department directly and provide them with that information.  If you wish to change your beneficiary or contingent beneficiary, the carrier will provided you with a form to fill out and sign.  Your writing agent can assist you with the proper forms and contact information.

If you have lost track your agent, the carrier may have your agent’s contact information.  It depends on whether the agent is still in the business or still writes new business to that carrier.  If your agent is no longer in the business or hasn’t contacted you periodically, it is in your best interest to ask another life insurance agent or to become your servicing agent.   This is another layer of protection to make sure your claim gets paid.  A good servicing agent will conduct an annual policy review.   That’s what I do with my clients.  This is especially important with cash value life insurance policies, either whole life or universal life, where you receive an annual statement.   You can save thousands of dollars in premiums or by transferring your cash value into new coverage or spending down your cash value instead of paying premiums towards the end of your life.

 

The Danger of being a policyholder without an agent

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April 25, 2011

11:01 AM

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Estate Planning, Policy Review

How is your life insurance carrier going to know you’ve died?    Carriers traditionally require the beneficiaries to notify them.   But what if your beneficiaries don’t know you have a policy or have died themselves, and your life insurance agent no longer is in touch with you?    Some light was shed on this problem when last Friday John Hancock  agreed to settle with the state of California over unpaid death claims.   If a policy becomes on orphan, the final resting place of the orphanage is your residence state.  The carrier sooner or later has to transfer that money over to the state as unclaimed property, and states right now can certainly use interest on that money, so that end is tightening up.   That’s a break for consumers because carriers will be more proactive in checking if their clients are alive or dead.   But it should never come to that.

Just think of it.  All that money sitting around waiting to be claimed.  (Check by residence state) What a waste. Let your beneficiaries know you have a life insurance policy and the carrier’s name.  Place your policy with your will and other vital papers in a place where they can be easily identified and retrieved.

Also have another layer of protection, don’t be an orphan policy holder.   If your life insurance agent is no longer in the business, you have an orphan policy.  That’s not a good idea, agents are more than helping you buy a policy.  They should be monitoring your policy as well.  They can help you save thousands of dollars in premiums or increase your death benefit.   If your agent is not contacting you, for whatever reason, establish a new agent of record.   This is especially crucial if you have a cash value life insurance policy, and you receive an annual statement.

You should have a  life insurance agent contact you annually to review your coverage.

  • Trade up.  You can potentially save thousands of dollars or increase your benefit by replacing your coverage.  If your in your 60’s or 70’s and still fairly healthly, might be time to trade in the old UL for a better performer.  Cash value can be transfered from you old policy into a new one and dramatically improve your situation.

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Charitable Remainder Trusts

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April 14, 2011

10:36 AM

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Estate Planning

After some research this FindLaw article offered the best explanation of Charitable Remainder Trusts.   Life insurance is a common component of these trusts to replace for your heirs the money that goes to charity, often with a second-to-die life insurance, also called survivor or survivorship life insurance.

The intriguing question is whether financial planners are offering the best, most objective recommendation for life insurance.  Do they play favorites with one or two particular carriers?   In 2011 many life carriers have introduced new survivor universal life (SUL) products.   I have access to comparison software on SUL for the major carriers.   It never hurts to get a second opinion on a proposal for life insurance.  Make sure you are provided with a full illustration to any life insurance proposal, and it’s best to review it carefully because your signature is required for that illustration for any permanent life insurance application.  They can easily be emailed as an attachment.  You could save a great deal of money by comparing apples-to-apples the illustration presented with alternatives from other carriers.   I will be glad to provide you free quotes comparing in detail the major life insurance carriers products and premiums.

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Whole Life or Universal Life?

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April 12, 2011

2:21 PM

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Universal Life, Whole Life

The short answer is Universal Life.

Whole life is much more expensive than universal life (UL), so unless your wealthy or under 40, universal life generally makes more sense.   To get the quality elements of whole life, considering adding a few whole life features to a regular UL.

Increasing face amount
Endow at age 100
guaranteed to age 121
guaranteed cash value

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Insurance Contingency Plans for Onset of Alzheimer’s

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March 30, 2011

11:05 AM

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Accelerated Death Benefits, Chronic Illness Rider, life insurance and long term care, Living Benefits, long term care insurance

The Boston Globe has an article today on the problems of care for people with in the early stages of Alzheimer’s.   A few of the people profiled in the article with Alzheimer’s are in their 50’s, though early-onset Alzheimer’s is fairly rare affecting 5% to 10% of the cases prior to age 65.

If you’re in your 50’s or 60’s and you’re still healthy, it’s a good time to prepare for this contingency.

Looking across the spectrum of long term care insurance products, you could get a traditional long term care (LTC) insurance policy.   The downside of this approach is that the carrier reserves the right to raise your premiums down the road.  Also it’s likely a reimbursement plan for qualified expenses.   That places certain limits on how your benefits are spent.  Let’s say in the example of someone in the early stages of Alzheimer’s and still fairly active, this would pigeon hole you into finding someone licensed and certified to perform LTC services.   You couldn’t have a friend, relative or suitable person perform those care duties and have your LTC insurance pay for it.

That’s why a hybrid LTC insurance approach may make more sense.    I recommend North American for permanent life insurance.  If you ever require chronic illness care, you can accelerate out your policy’s benefit in cash, and spent it however you deem fit.   If you don’t need LTC, your heirs get the life insurance benefit.

Also setting up an annuity with a LTC rider is a good approach.  You can get annuities with 2 to 3 times a LTC benefit.  So for example a $100k annuity would give you an additional $200k to $300k insurance to provide for LTC.   Look for annuity with an indemnity option, pay out in cash, rather than reimbursement for maximum flexibility.

Let me know if you’re interested in any of these products.

Single Parents: Life Insurance is Inexpensive

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March 29, 2011

11:20 AM

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Term Life Insurance

Genworth recently did a survey showed 69% of single parents don’t have life insurance.  It doesn’t have to be.  Term life insurance is inexpensive.  You can probably find something for under $20 a month.  For example here are a few quotes for male age 45.

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Higher Quality Permanent Life Insurance

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March 28, 2011

3:56 PM

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Universal Life, Whole Life

Permanent life insurance is either universal life (UL) or whole life.    UL is much more affordable, so generally that’s the best choice, unless you’re very well off.   But UL’s don’t automatically include whole life’s quality features, so let’s look at three whole life features you can structure into your UL.

Whole Life has a lifetime guarantee.  You can add a lifetime guarantee to a Universal Life.   For example, let’s take a 59 year old female, best health rate.

  • Lifetime Guarantee
Annual
Premium		 Face Amount Product Carrier
$1,116 $100,000 Guaranteed Universal Life Aviva Life & Annuity
$2,995 $100,000 Whole MassMutual

 

Both have lifetime guarantees but this guaranteed UL has a level face amount and participating whole life, like this one, the face amount increases over the years.  Is that important?  It depends how old you are.  59 is a bit young to have a level face amount.   What will $100,000 be worth 20 years from now?

So let’s structure the UL with an increasing face amount and quote North American, since they have a critical care rider which allows you to accelerate out your death benefit if you need long term care.

  • Increasing Face Amount
Annual
Premium		 Face Amount Product Carrier Feature
$1,559.00 $100,000 Universal Life North American Increasing Face Amount: solve $1 at age 100

Continue reading “Higher Quality Permanent Life Insurance” →

Survivor Universal Life Uses

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March 23, 2011

11:55 AM

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In your 60's, In your 70's, Product, Universal Life

A couple for estate planning purposes may create one life insurance policy that pays out when the last surviving person passes away.   The product used for this is called a SUL or Survivor Universal Life.  To lock down the death benefit, a lifetime guarantee is usually part of the coverage, so look for the the letter G in the mix, as in SUL-G.  It is less expensive to have a joint policy as a couple than two separate individual policies.   Also you qualify for coverage even if one of you is uninsurable or in poor health.   It’s uses are generally:

 

  • Estate Taxes

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