There are certain times in your life when seniors or aging adults ask you specific targeted tough questions that you do not want to answer. High school seniors are constantly being asked about their plans after college. “Where do you want to go to college? What do you want to study?” In my late twenties, I was being asked “why don’t you get married?’ Which I know is followed up with “when are you having kids?”
It’s impossible to shake, but inevitably there are times in our lives when we will be asked questions we don’t necessarily want to answer. In the spring of 2005, I graduated from the Savannah College of Art and Design. More than anything else, I was ecstatic to make it through finals. Leading up to graduation, I was consumed with working 30+ hours weekly at Starbucks, managing a full class workload, volunteering at my local church and a full-time very attractive and very high maintenance girlfriend. The last thing on my mind was a plan for post graduation. I didn’t have time to focus on what could be accomplished at a later date. I kept telling myself that after graduation, I would worry about a career.
Am I the only one that focuses on what is right in front of my face and neglect the sometimes-important decisions that are floating in the background? I tend to think not. September is Life Insurance Awareness Month. Unless you are a life insurance sales agent, life insurance probably isn’t in the top 10 of your to-do list. Take a second and look into the peripheral of your life and ask a question that you may not want to answer – Do you have the coverage you need to protect your family in the event of death?
Apparently, I am not the only person that has important decisions floating in the peripheral. J.D. Power and Associates points out that 40% of American adults have no life insurance at all. They are also estimating that 50 million people lack adequate life insurance coverage. How do you know if you have enough life insurance and if you should even buy any period? What is the right age to buy life insurance? Do your aging parents have life insurance? What happens to life insurance that is not claimed? These are all valid questions that many of us desire answers to.
Thankfully, I was blessed in my very first job out of college, working for a large broker-dealer in the Tampa area. While the pay was sub-par, it did introduce me to the world of financial planning and investments. Below are some tips and advice for planning and working with life insurance for yourself or your aging parents.
What is life insurance?
Generally speaking, if someone depends on you financially, you probably need life insurance. There are many different types of life insurance, but the bottom line is very similar: cash is paid to your family after you die. The cash is referred to as a death benefit, that allows your loved ones to remain financially secure. The money that is paid to your family after death can be used for mortgage payments, college tuition, daily living expenses and other essential expenses.
Who really needs life insurance?
As a 22-year-old college graduate in 2005, I wasn’t responsible for anyone or anything. It was not an appropriate time in my life to invest in life insurance. Now that I am in my 30’s and planning for marriage and a potential family it is quite appropriate to start researching some of my options. To determine if you or someone you love needs life insurance, ask yourself a few simple questions:
- If you died tomorrow, how would your loved ones fare financially?
- Would your loved ones have the money to pay for your death expenses?
- Without your contribution to the household, could your family afford to pay all of their bills?
Nobody wants to think about the day after death. Having a plan in place now, can save your loved ones financially in the future.
How do I find out if my parents have a life insurance policy in place?
Hands down, the best way to determine if your parents have a life insurance policy is to simply ask them. I recommend having a file cabinet with copies of important life documents enclosed – will, insurance policies, veterans benefits and mortgage paperwork are a few of the more important documents. If your parent(s) are no longer living, the work to track down policies can be frustrating. In a 2011 NY Times article, writer Paul Sullivan notes that Florida has approximately 9.9 million unclaimed life insurance accounts worth more than $1 billion. Be certain that you or your loved ones policy does not go unclaimed.
How do I buy life insurance?
If you don’t have life insurance or need more coverage than you already have, there are three main ways to obtain additional coverage.
- Through an Insurance Professional.
- Direct purchasing over the phone or Internet.
- At work through an employee benefits package.
If you currently have life insurance, but don’t fully understand your policy be certain to contact the insurance professional that sold you the policy or the insurance company that has underwritten the policy. Life insurance can be a great benefit to you and your family if it is implemented properly.
Are you blind yet from looking into your peripherals? Life can certainly be demanding, but I encourage you to carve out time on a weekly or monthly basis to address important issues that may be lingering in your peripheral. To get more information about life insurance check out LIFE – a non-profit organization dedicated to educating the public on financial responsibility. On their website you can download a free in-depth insurance guide.
I am not a life insurance professional or a financial planner. My advice comes from working alongside professionals in the industry. Before you make any financial decisions, I highly encourage you to speak with a trusted financial professional. If you do not have a trusted advisor, my personal financial advisor Jack Kennedy is a man I highly recommend. JB Meridian Advisors is located in central Florida, and serves families all across the U.S. including Sarasota & Manatee counties. Make sure you answer some tough questions about you and your senior parents insurance policy.