Part of being a responsible adult is having life insurance in place to handle your final affairs. But there is another step you should take after buying your policy – talk to your family about your insurance policies. There are important things they should know about your life insurance, and the experts at Hometown Life Insurance can help with this conversation.
Many families count on a life insurance policy when a loved one passes away to handle any remaining debts and funeral expenses. Your family needs to have some details about your life insurance, so they are not scrambling to find information when they are grieving. When you sit down to talk about it, what should you say?
What Does Your Family Need to Know About Your Life Insurance?
Insurance can be complicated, so you may be wondering what details your family needs to know about your life insurance. These points can help guide your discussion and give you a place to start.
Who is your policy through?
Share the name of your insurer and their contact details with your family. If you use an agent to handle your insurance, tell your family and your agent – and sign any releases with your agent to allow them to talk with your family if something happens to you. Keep your policies together with the rest of your important paperwork, and let your family know where that is kept. Share details of how to access your digital information – sites, passwords, and log-in IDs.
How much coverage is available?
An important point to discuss is how much coverage you have available. If you have multiple policies or a policy through your employer or another source, be sure to talk about all your policies. It is important to align expectations with reality as your family may be relying on your insurance policies for their financial plans.
Are there other benefits associated with the policy?
Does your life insurance policy offer any other benefits that may be relevant to your family? For example, does the policy allow for conversion to an annuity? Life insurance is an investment tool that can be an important part of your family’s financial planning, so be sure to know and share the advantages associated with the policy.
What type of policy do you have?
Clarify the types of life insurance you have purchased – term or whole life – and the policy conditions. If it is a term policy, when does it end? If it is whole life, is it variable, universal, or traditional? Do you receive dividends through a participating policy? If you have group life insurance through work or another affinity group, be sure to share that, too.
Who is the beneficiary?
Tell your family who the beneficiary is. If different policies have different beneficiaries, share those details. It will be easier and faster if everyone knows who to contact.
How can your family access your life insurance benefits?
Talk about how your life insurance benefits can be accessed. Have a plan – will your family notify your agent or your carrier directly? Make sure the details of how to access the benefits are clearly understood.
What steps does your family need to take if something happens to you?
Identify what to do and who will do what. Right after a loss and when people are in mourning, they are not thinking clearly. Setting out a step-by-step plan in advance will give grieving family members something to rely on and a way to move forward.
Share your life insurance goals with your family
Be sure to talk to your family about the goals you hope to accomplish with your life insurance purchases. This can be a difficult conversation to have, but it is best not to wait too long. Different people may have varying expectations for how affairs will be settled, so sharing your plans and goals and making sure they align with those of your family is helpful.
For example, some people want to convert policies to annuities or cash in on part of the policy benefit. Maybe you have some funds earmarked for a particular purpose upon your death – sharing those details with your family is important so they can make sure your wishes are fulfilled. Also, let your family know if your employer has a life insurance policy in place for you; they will benefit from.
Talk again when things change
This should not be a one-time conversation. If you make changes in the future to any of your details – your policies, coverage, beneficiary, or agent – tell your family. As your family circumstances change over time, so too may your life insurance needs and goals. You may decide to cancel or convert a policy. Have the discussion again when these changes happen – this will ensure you and your family stay on the same page about this important point. You may even find that as you talk about your life insurance, you realize you need to change your coverage.
What if you do not have life insurance?
If you are reading this and do not have life insurance yet, now is the time to buy a policy and talk to your family about it. You never know when something could happen to you, and you want to be sure to leave your family protected. Hometown Life Insurance can explain your options and help you make the best decisions for your family.
You understand now what your family needs to know about your life insurance, and you can contact the experts at Hometown Life Insurance for more information. Our licensed professionals will be happy to answer any questions you have.
