Life Insurance Plan Considerations
Life insurance plans can have some easy to fall into pitfalls if the policyholder is not careful and attentive. Here are five considerations to keep in mind to make sure insurance proceeds go to intended beneficiaries:
- Tell the Truth: To avoid a policy being voided, disclose all relevent medical and health issues, such as smoking and drinking habits.
- Keep it Current: The insurance policy can lapse if timely and consistent premium payments are not being made.
- Have Backup Beneficiaries: It is important to not only keep beneficiary designations current, but have secondary and final beneficiaries, and consider naming a trust as the final beneficiary.
- Avoid Risks: Full policy payout may be denied to beneficiaries if the policyholder dies due to engaging in risky behavior or suicide.
- Have a Conversation: Beneficiaries need to know not only that they are beneficiaries, but also where all related documents are kept.
See Bonnie Bowles, Don’t Let Life Insurance Proceeds Go Missing, Examiner, Sept. 9, 2014.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.
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