A necessary component of estate planning is organizing your records. This is because when you die, your family will have to locate vital information and companies to take actions on your holdings. The New-Enterprise’s recent article, “Relieve your loved ones of a huge burden by being proactive, and organized,” helps us learn how to get a person’s life in order for a spouse or family to act, when the time comes.
Keep your insurance policies (and a record of them) in at least two places, where they’re safe and easily accessible. That will reduce any delays in processing the life insurance. However, you shouldn’t keep life insurance policies in a safe deposit box because it’s required to be sealed temporarily upon the death of the owner. That will create a delay in the settlement of the proceeds. Here’s a list of the information to keep. For every policy, list:
- The name of the issuing insurance company;
- The address of the issuing company;
- The name and U.S. headquarters of the group, if the issuing company is part of a group of companies;
- The policy number;
- The date the policy was issued;
- The amount of the death benefit;
- The contact info of the agent/broker who sold you the policy;
- The type of life insurance policy issued; and
- Where the original life insurance policy is located.
In addition, set out these directions on how to file a claim, when the time comes:
- Obtain multiple copies of the death certificate;
- Contact the insurance agent or the company to complete the necessary forms; and
- Submit the policy claim along with a certified copy of the death certificate.
It doesn’t usually take very long for the settlement to be issued, once you’ve submitted the claim. You’ll normally be able to take the insurance proceed distributions in one of the following options:
- A lump sum;
- A specific income provision, which is payments of both principal and interest made on a predetermined schedule;
- A life income option, which is a guaranteed income for life (the amount depends on the death benefit, beneficiary’s gender and age at the time of the insured’s death); and
- An interest income option, where the insurance company holds the proceeds and only pays interest on them, with the death benefit going to a secondary beneficiary at your death.
By undertaking the organizational side of your insurance policies now, you’ll make it much easier for your loved ones, when it’s time for them to file claims.
As a reminder, if you own large life insurance policies in your own name they will a taxable part of your estate, contact an estate planning attorney to show you the benefits of an irrevocable Life Insurance Trust.
Reference: The (Elizabethtown, KY) New-Enterprise (September 22, 2018) “Relieve your loved ones of a huge burden by being proactive, and organized”