If we examine how most generational wealth is made in this country, the options are narrowed down into three areas: Real Estate, Stock Market, and Life Insurance. Out of the three, life insurance is perhaps the cheapest way to leave something behind for a loved one without worrying whether the value will be available when needed. If you own life insurance or if a policy is purchased on your behalf from your employer, here are four things you should be checking annually as a policyholder:
- Make sure you can put your hands on your policy. Place the original policy in a secure fireproof place and store electronic copies on your computer or a cloud-based server. Losing a loved one can be stressful and depressing. Having essential documents like life insurance in one central location relieves some of the stress associated with planning a funeral.
- If you have a group policy with your employer, locate the benefits statement, and record all relevant accounts. Attached to the benefits statement should include the HR benefits manager's contact information.
- Consider if the coverage amount and the beneficiary designations are still appropriate for your needs. You may have purchased your policy before building a family. Now that you have children, the death benefit amount may not be sufficient.
- If you have a policy and the thought has crossed your mind to lapse it, make sure you are healthy enough to buy a new policy, should the need arise. This situation happened to a friend of mine. Her husband canceled her life insurance policy because he found a cheaper rate. He forgot how difficult it was to get the first policy on his wife. The new carrier would not underwrite her. She became uninsurable and was without a policy.
Be a responsible policyholder and set a date once a year to check all of your policies. Your beneficiaries will thank you.
About Terrell Dinkins, MBA, ChFC®, CDFA®
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Terrell Dinkins, MBA, ChFC®, CDFA® is an investment adviser representative of and offers investment advisory services through OBN Wealth Advisors, LLC, a registered investment adviser offering advisory services in the State of Georgia and other jurisdictions where registered or exempted. Main Office: 950 Eagles Landing Pkwy, Suite 216, Stockbridge, GA 30281. Tel: 404-723-9780. Website: OBN Wealth Advisors. Image by Gerd Altmann from Pixabay