If you’ve secured a solid life insurance policy, we commend you for making the necessary arrangements to secure your family’s financial future. If you’ve already had a policy review performed by an expert to work out any kinks or changes in your plan, you’re most definitely on the right track. Now, we want to make sure that your family is also equipped with everything they need to know to distribute your life insurance money wisely.
Whether you wish to use your life insurance to leave an inheritance, replace an income, or pay off debts or all of the above, it’s always best to keep your beneficiaries in the know. Here are three ways to prepare your family to handle your life insurance policy with care.
Choose Your Beneficiaries Wisely
You always want to assign a beneficiary to your life insurance policy. Otherwise, this money could end up in probate as a part of your estate. This is when you hear horror stories about debt collectors taking the finances from your life insurance plan or families fighting over money after a loved one has passed. We’re sure you don’t want this happen, which is why you shouldn’t leave your beneficiary up to chance. When choosing a beneficiary, think about your loved ones who are financially responsible and have your families best interest at heart. This way, your family’s finances are in good hands, and the money is distributed in the way you desire.
Talk About Your Outstanding Debts
Even if this conversation is an uncomfortable one, it’s worth happening. Your beneficiaries should be aware of how the money from your policy should be distributed. This includes how you wish to pay off personal loans, like your mortgage or private student loans. Let them know about the crucial debts that need to be addressed right away, and the ones that they won’t need to pay. Did you know that the government forgives federal student loans after someone passes? In these instances, some creditors will still contact the family for a debt they don’t have to pay back.
Show Your Family How to Collect Your Policy
You’ve made all of these preparations to ensure that your family continues to live comfortably, so you don’t want to forget to let them know that this money is available. Make sure your beneficiaries are aware that you have taken out a life insurance policy. You also want to provide them with a copy of the policy so they have all the information they will need when the time comes to file a claim. Without this, it could potentially take them years to retrieve the money. By taking these necessary steps, you’re reducing any possible problems that may prohibit your family from getting the full amount that you prepared for them.
Independent Policy Review
The insurance world can be difficult to navigate. Without a clear understanding of their current plan, it’s difficult to be certain that your clients have the right coverage. If you’d like to take a closer look, you’ve come to the right place. We can answer your life insurance questions and provide the clarity you need to sleep easy. Learn more about our services or join our newsletter today. To contact us, click here.