Life Insurance Guide

LIFE INSURANCE BUYER'S GUIDE
Prepared by the National Association of Insurance Commissioners
The National Association of Insurance Commissioners is an association of state insurance regulatory officials. This association helps the various insurance departments to coordinate insurance laws for the benefit of all consumers.
This Guide Does Not Endorse Any Company or Policy Buying Life Insurance
When you buy life insurance, you want coverage that fits your needs.First, decide how much you need - and for how long - and what you can afford to pay. Keep in mind the major reason you buy life insurance is to cover financial effects of unexpected or untimely death. Life insurance can also be one of many ways to plan for the future.Next, learn what kinds of policies will meet your needs and pick the one that best suits you. Then, choose the combination of policy premium and benefits that emphasizes protection in case of early death, or benefits in case of long life, or a combination of both.It makes good sense to ask a life insurance agent or company to help you. An agent can help you review your insurance needs and give you information about the available policies. If one kind of policy doesn't seem to fit your needs, ask about others.This guide provides only basic information. You can get more facts from a life insurance agent or company or from your public library.(4-99)IMPORTANT THINGS TO CONSIDER
1. Review your own insurance needs and circumstances. Choose the kind of policy that has benefits that most closely fit your needs. Ask an agent or company to help you.
2. Be sure that you can handle premium payments. Can you afford the initial premium? If the premium increases later and you still need insurance, can you still afford it?3. Don't sign an insurance application until you review it carefully to be sure all the answers are complete and accurate.
4. Don't buy life insurance unless you intend to stick with your plan. It may be very costly if you quit during the early years of the policy.
5. Don't drop one policy and buy another without a thorough study of the new policy and the one you have now. Replacing your insurance may be costly.
6. Read your policy carefully. Ask your agent or company about anything that is not clear to you.
7. Review your life insurance program with your agent or company every few years to keep up with changes in your income and your needs.

Life Insurance

Talk with parents about their finances, last wishes - San Jose Mercury News

YOU'LL HELP THEM ORGANIZE AFFAIRS, AND HELP YOURSELF
By Pamela Yip
Dallas Morning News

DALLAS - It is the one discussion that adult children must have with their aging parents.

Many cringe and avoid it because the subject's so sensitive - your parents' finances, how they're organized, and what their last wishes are.

Some parents guard their finances closely, even from their children. To them, it's a matter of privacy.

Some fear that their children are only after their money.

But helping your parents organize their finances and seeing whether they've planned well so that their last wishes are carried out could open the door to examining your own finances.

That's what happened to Susan Livingston of Dallas.

"As an occupational therapist specializing in home health and geriatrics, you might assume that I would be very capable at managing my elderly parents' finances as they aged, with the understanding of the dynamic of loss and how money is such a symbol of independence," she said. "If only that were true."

Livingston's father, who died in November, had cancer, and her mother, who has Alzheimer's disease, is in a nursing home in Pennsylvania.

They didn't have their finances organized and weren't eager to talk to their children about them.

'Very guarded'

"My parents were very guarded - that money is not your business," said Livingston, 52. "They didn't plan for the obvious inevitability that one of them or both of them will pass away, and that somebody will have
Advertisement
to deal with it."

She said she had to "dig through the desk" the day before her father's funeral to find out what assets her parents had and whom to contact.

Her parents had refused to draw up a power of attorney, which would have authorized another person to handle their financial affairs if they were incapacitated.

"My mother was so paranoid," said Livingston, who is her mother's guardian and is still sorting through her finances. "She would say, 'You just want our money.' "

As awkward as the subject is for most families, it has to be addressed.

"It's essential for caregivers to know the state of their family members' legal affairs and to be secure in the knowledge that key legal decisions have been made and documented before a crisis occurs," said Sandra Timmermann, director of the MetLife Mature Market Institute, part of Metropolitan Life Insurance.

"In some instances, older adults are reluctant to share financial and legal information with adult children," she said. "In such cases, it might be advisable that they consult with a neutral third party, such as an attorney, a qualified financial adviser, social worker or trusted friend to address legal issues and then have an attorney prepare the proper documents so that they will be accessible to family members in an emergency."

When talking to parents about their finances, children must be sensitive to their parents' need to still feel in charge, said Lynn Lawrance, a certified financial planner at Financial Network Investment in Dallas and Livingston's planner.

Independence, control

"The key thing for your parents is a sense of independence and control," she said. "Try to help them offload some of the burden of handling the finances with someone they can trust. Be careful of trying to push that on your parents because independence and control are crucial to them."

It's a delicate dance and one that will lead many people to seek a financial adviser who can help them. There are specific things you need to look for in an adviser to help your parents.

Much of the advice applies to consumers in general, but it's especially important for seniors, who are prime targets for unscrupulous salespeople.

"The last thing people of this demographic need are product pushers," said Rick Salmeron, a certified financial planner at the Salmeron Financial Network in Dallas.

Pay close attention to the questions asked by a prospective adviser.

"When an amateur asks questions of a client, those questions are chosen to determine which product should be sold," Salmeron said. "The conversation is not actually about the client per se."

Follow your instincts.

"Boomers and seniors can and will sense that the conversation is not about meeting their needs, but about selling something," Salmeron said. "When this happens, run. You now know you're working with a salesperson who is trying to make a quota, not someone who is looking out for your best interests."

Looking in a mirror

By helping your parents, you'd be surprised at how the process will turn the mirror on your own financial planning.

You also see what retirement is really like and how much money it really takes to live a post-work life.

"You learn from your parents' mistakes - what you shouldn't do - and you also learn about what they did that was right that you also should do," Salmeron said.

Determine if you have enough life insurance to support your family after your death. Document where your bank accounts are located and what advisers to contact at your death.

"Educate your children," added Livingston, who said she and her husband have talked about their finances with their three grown, or nearly grown, daughters. (Two are in college and one is in the Navy.)

"Share with them what you have set up. Provide them with the tools to help you when you need help, in advance of when you really need help," she said. "During a crisis of health, it may be too late."

Technorati Tags: life insurance