- Inheritance and death taxes, which many states have
- Delays and the expense of probate
- Full access to proceeds by creditors
2. Two or more backup (secondary) beneficiaries should be named.
3. At least every three years, a written confirmation of the status of policies and beneficiaries should be requested from the insurer’s Home Office.
4. The insurance product should match the problem. Be sure you have the right policy for your needs.
5. Above all, verify there’s enough life insurance to provide food, clothing and shelter, and to pay off debts so that those you love can continue in their present lifestyle.
6. Don’t name minors as outright beneficiaries. Instead:
- Consider a trust for your spouse and children, and name the trust as recipient. When your children reach adulthood, you can change the beneficiaries to them directly.
- Or, use a settlement option to pay the proceeds over a long period of time.
7. Consider an ownership transfer of life insurance to others to save federal estate taxes.
8. Check to see if your business or practice can provide your family with insurance on a more cost-effective basis.
9. Remember that term insurance, by definition, will expire and contractually becomes more expensive as you grow older.
10. Don’t buy life insurance as though it were a commodity. The knowledge of your financial professional, the integrity of the insurer, and their commitment to service can make a major difference as to the cost effectiveness of the life insurance.