Articles Tagged with life insurance

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BabyNew parents face so many new challenges–from figuring out how car seats work to figuring out how babies work. I remember taking a deep breath as we opened the door of the hospital, loaded our daughter into the car (including several annoying moments in the parking lot trying to gently put her new born and limp body into the brand new car seat) and out into a whole new world.

Part of that world includes estate planning. I built my practice, in the early days, by giving workshops at preschools, parenting groups and new parent groups at all of the local hospitals. New parents are often sleep deprived, terrified, and overwhelmed. But here’s what I told them, over and over again — you don’t have to do everything now, just put the basics in place and promise yourself to revisit your estate plan in a few years, when you are getting some sleep.

If you are a new parent, or know one, here are the basics:

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shutterstock_110867483 (1)Consumer Reports estimates that at least $1 billion in benefits from forgotten life insurance policies are waiting to be claimed. Often, when I meet with adult children administering a trust after the death of a parent, they’re not certain about whether not that parent had life insurance policies. And many veterans of WWII, the Korean War, and the Vietnam War left behind policies that they purchased while on active duty through the Veterans Administration.

I realize that I’m stating the obvious here, but you can’t make a claim on policies that you don’t know exist. And generally speaking, life insurance companies aren’t going to go out of their way to notify potential claimants of policies waiting to be claimed, although several of the largest ones have agreed to search for deceased policy holders more diligently: AIG, Forethought, John Hancock, MetLife, Nationwide, and Prudential.

Unfortunately, only 10 states have centralized databases of insurance policies issued in their state, and California isn’t one of them. (They are Alabama, Louisiana, Missouri, New York, North Carolina, Ohio, Oklahoma, Oregon, Texas, and Vermont).

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landing-60527_150On Monday we celebrate Memorial Day, and that seems like a perfect occasion to write about something that many people may not know about until their loved one dies: life insurance policies that date back to World War II or the Korean War.

Did you know that the U.S. government issued over 22 million life insurance policies to service members between 1940 and 1951? These policies were for $10,000 and were either permanent or renewable. Today, according to the US Department of Veterans Affairs, there are over 950,000 of these policies still in force, and the average age of the policyholders is 81 years old.

The government began issuing life insurance policies to service members back in 1917 because commercial insurance providers either didn’t want to cover soldiers going off to World War I or charged too much to do it. (Which makes me think that their underwriters had a pretty good idea of what that war was like.)