With life insurance being a product that you are unlikely to buy more than once or twice in your lifetime, it is normal to be out of the loop when it comes to the ins and outs of policy protection. Here are a few tips to hep you step over any pitfalls that may be in your path to obtaining the coverage you need.
Get the Right Type and Amounts
Life insurance policies are generally sold by highly commissioned sales people or by order takers. In both scenarios, you need to be sure that they don’t talk you into a policy or amount that you don’t need. Overlooking the type or amount of insurance that are right for you is easy to do, so getting unbiased opinions is often a smart choice when shopping for your policy.
Don’t Name a Minor as a Beneficiary
If you want to name a minor as the primary beneficiary or secondary beneficiary of your policy, keep in mind that there are some drawbacks to that decision. First, your life insurance would have to go through a court process and become subject to the control of a financial guardian on the minor’s behalf. Second, whatever is left after the guardianship is over would be distributed to the minor when they turn 18.
To avoid this hassle, you can name a trust as beneficiary of your life insurance, thereby keeping your life insurance out of court and ensuring the minor doesn’t receive control until they ready. Plus, you get to decide who takes care of the life insurance money you are leaving behind until it’s distributed to the minor. You can even build in protection against their future divorce or any creditor issues with this method.
Compare Quotes for Whole and Term
Experts suggest most people only need life insurance to cover their working years and while they raise a family. Term life insurance is typically affordable and covers you when you need it most. Permanent insurance is best when you know you will have estate taxes to cover or if you want to use insurance as an investment vehicle with guaranteed returns.
A Personal Family Lawyer® offers Family Wealth Planning Sessions that help you protect and preserve your wealth for future generations and a part of that is by ensuring that the life insurance policies you have are guaranteed to go to who you want and used the way that you want. Contact us today to get started.
This article is a service of Levi Alexander, Personal Family Lawyer®. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session, ™ during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.
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