Here are ten ways to help make sure your life insurance gets paid to those you wish after you die:
One. Make sure your statements on your policy application for truthful. Some require that they be absolutely truthful, while others require that they are truthful to the best of your knowledge and belief.
Two. Make sure you properly designate your beneficiary, and contingent beneficiary. This means you should not only clearly state their name, but make sure the percentage allocation of the policy benefits, if any, are accurately calculated.
Three. If your policy lapses for any reason, and is reinstated, you may have restarted a two year contestability period. This means that if you died within two years of the reinstatement, the insurance company may re-review your policy application to look for any material misrepresentations.
Four. Be careful if you made any changes to your policy after it has been in effect for two years or more. Some insurance companies will try to restart the two-year contestability period after you made any changes.
Five. If you do not list a contingent beneficiary on your life insurance application or policy, your estate may get the policy benefit if your designated beneficiary is not living in the time of your death. This is why it is important to have a will to specify what to do with any assets that come into your estate.
Six. If you have a spouse who was the beneficiary on your life insurance policy and you got divorced, you may need to update your life insurance beneficiary designation. If you still intend on having your ex spouse as your life insurance beneficiary, you should send a reaffirmation to the life insurance company to remove any doubt that you still wish that person to be the beneficiary. A recent change in Florida law, as well as the laws in several other states, may deem your ex spouse to have pre-deceased you for purposes of your life insurance beneficiary designation even if your ex spouse is still alive. While there are several exceptions to the law, you should remove any potential doubt by confirming with your life insurance company what your intention is after your divorce.
Seven. Make sure your beneficiaries know who your agent or life insurance company is. There is no global database of life insurance companies so try to make it as easy as possible for your beneficiaries to make a claim after you die. They may not know which company to make a claim against. It is best if you give them a copy of the policy so they have the policy number and insurance information.
Eight. If you do you want to change your beneficiary to your life insurance company, read the policy very clearly to determine how you must do this. Some policies may also fall under an ERISA plan which means there may be additional terms beyond the policy that set forth how you can properly change the beneficiary.
Nine. Make sure your premiums are paid to date and make arrangements with someone you trust to continue paying your premiums in the event you become incapacitated. Even if you're incapacitated, you may still have to pay your insurance premiums. If you're in the hospital for an extended period of time, you should not want to risk losing the insurance benefits. Consider having a secondary payor designated on your policy and request that the insurance company send a copy of your bill to that person.
Ten. Most life insurance policies in Florida have a two-year contestability clause. That means that if you die within two years of the policy, the life insurance company may go back through the application for any material misrepresentation in order to deny the claim and refund the premiums. When it has been in effect for two years, the only time the insurance company, in general, can deny the claim is if the premiums were not paid to date. Be careful if the life insurance agent tries to sell you another policy in order to get you to switch companies or change your policy that you currently have. If your policy has already been in effect for two years, you may restart another two-year clock and risk the policy being denied if you die within two years of getting the new policy.
These tips are in no way inclusive of all of the potential life insurance issues that could arise. However, making some of the adjustments mentioned here, or at the very least being aware of some of the dangers, can hopefully help you better protect the beneficiaries you wish to help.
If you have any doubt as to whether your beneficiaries may get the life insurance benefits, or want to make sure that somebody looks out for their interest once you die, feel free to give our information to them so we can try to help them with their life insurance claim. You can reach a Florida life insurance lawyer at the Law Offices of Jason Turchin at 800-337-7755.