Personal Finance Tips

A relative has just died. He had a life insurance policy with you listed as the beneficiary. There’s just one problem: the life insurance policy is missing. You have no idea which insurance company wrote it.

If you find the missing life insurance policy in the future, are you still eligible to receive the death benefit?

Hope they paid their insurance bills

If you’re a beneficiary and you find the lost life insurance policy shortly after the insured dies (within six months to a year, for example), claiming the death benefit should be trouble-free.

First, determine if the insured had term or permanent life insurance. If the insured held a term policy, you’ll receive the death benefit if he died before the end of the policy term. If he died after the policy expiration date, you would get nothing.

If the insured had a permanent life policy, you’ll receive the money if the death occurred while the policy was “in force,” meaning all premium payments were made up until the time of death. If the death was a while ago, you’ll receive the benefit with interest from the date of death.

If the life insurance policy lapsed — meaning the insured stopped making premium payments before he died — there’s a chance you might get nothing. When a permanent life insurance policy lapses, most insurance companies switch its status from permanent insurance to one of two options:

“Extended term” — The insurance company uses the cash value of the policy to buy a term life insurance policy for the same death benefit using the cash value of the policy. The death benefit will continue for the longest period the cash value will purchase.

“Reduced paid up” — The insurance company will keep the policy in force permanently, but will reduce the death benefit.

Gerry Brogla, an actuary for State Farm, says in the majority of the cases at his company, the permanent policy continues as extended term if it lapses. At State Farm, extended term is the default option for most permanent policies.

If the policy lapses, and the extended-term period expires before the insured dies, the policy is worthless and the life insurance beneficiary will get nothing. If the insured dies before the extended-term period is up, the beneficiary will receive the death benefit. If the policy lapsed because the insured died (thus ending premium payments and causing the insurance to be placed in extended-term status), the beneficiary will still collect the full death benefit, regardless of when the extended term was up. The beneficiary always needs to supply the insurance company with a death certificate to verify the date of death.

There is no time limit during which a life insurance beneficiary must step forward to collect the money, according to Jack Dolan, spokesman for the American Council of Life Insurers. “If a person shows up 30 years after [the insured's] death, the company still makes good on it,” Dolan assures.

What happens if no one ever reports the death?

If the insured dies and the insurance company does not learn of the death, the policy lapses. Insurance companies will take steps to find out why a policyholder stopped making payments.

When an insurance company stops getting payments, it sends letters to the insured informing him the policy may lapse as a result of unpaid premiums. If the letters go unanswered, the company might initiate a search to find the insured. If that comes up empty, the company will then lapse the policy.

If a beneficiary to a policy never steps forward, it unfortunately means the insured paid money to a policy throughout his life and his beneficiaries never see a penny. This is why its a good idea to make sure beneficiaries are aware of any life insurance policies you have.

If you’re lucky, the state may have your money

In some cases when a beneficiary fails to claim a death benefit for several years, the money is transferred to the state where the insurance policy was purchased under the escheat laws.

If a company knows an insured died and it cannot find the beneficiary, it must turn the full death benefit over to the state comptroller’s department within three to five years of the insured’s death. The money is transferred to the state where the insured bought the policy. The money is considered “unclaimed property” and gets lumped in with dormant bank accounts and uncollected rent deposits. The comptroller’s department maintains a database that lists the names and addresses of lost life insurance beneficiaries.

Many states will try to contact life insurance beneficiaries in an effort to pay the death benefits. In Texas, for example, the names and addresses of the beneficiaries are published annually in each county in the state. In New York, the Web site of the New York State Comptroller’s Office of Unclaimed Funds has an online search to find any unclaimed death benefits owed to you. You can find out the procedures in your state by contacting the office of your state comptroller or treasurer.

Keep in mind your chances of finding the policy with the state are slim. The insurance company has no obligation to hand the money over to the state if it’s unaware the insured died. In most cases, it’s the beneficiary who contacts the insurance company.

Also, the insurer only transfers the money to the state three to five years after it cannot find the beneficiary but knows the insured died. If the state doesn’t have the death benefit, it’s likely the insurer is still looking for the beneficiary or doesn’t know the policyholder has died.

Unclaimed death benefits are rarely transferred to the state. Dave Potter, a spokesman for Hartford Life, says less than 1 percent of his company’s death benefits go unclaimed.

Del Chance, a life insurance claims manager at State Farm, says, “Turning over life policy benefits to an individual state after the death of an insured is extremely rare. State Farm utilizes their own search techniques as well as outside vendors to locate lost beneficiaries in the event of the death of one of our insureds. By and large these procedures have always located the beneficiary.

Tips for making sure your life insurance beneficiaries get your death benefit:

1. Give your beneficiaries your policy information. It can be a difficult and awkward conversation, but an important one.

2. Keep all your financial records (especially your life insurance policies) in one place. Don’t force your beneficiaries to search your house from top to bottom after you die.

Tips for looking for lost life insurance policies:

1. Go through canceled checks or contact your relative’s bank for copies of old checks. Look for checks made out to insurance companies.

2. Ask those who may have known about your relative’s finances. Speak with the relative’s lawyer, banker or accountant. Also contact the relative’s insurance agent.

3. Contact your relative’s past employers. They might know of possible group life insurance. The insured might have also purchased supplemental life insurance through work.

4. Check the mail for a year. Premium bills and policy-status notices are usually sent annually.

5. Look at income tax returns for the past two years. Check for interest income from policies or expenses paid to life insurance companies.

6. Contact the Medical Information Bureau. If your relative bought life insurance fairly recently, there might be a trail of the companies to which he applied. The Medical Information Bureau (MIB) maintains a database that might show if insurers requested your relative’s medical information within the past seven years. Record searches can be requested through the MIB’s Policy Locator Service and cost $75. The MIB says that nearly 30 percent of searches turn up leads.

You have been hearing a lot of ideas on how to protect your investments and finances whether from the media or from other people and some from books. They tell you to save up for you to have a good retirement. But one thing that they often miss to discuss is tax planning. The money that you are going to have throughout the year depends on your taxes. For example you set aside filling out the forms to file your taxes and then the next day your fill out the forms in a rush then it results to a large amount of money that you have to pay each year. The way you file your taxes also affects the way you save money. This means that you might be paying a lot more than you are supposed to. But if you have a good tax planning then there is a big chance that you can avoid such problems. Planning may consume a lot of your time and it may be tedious but this will definitely benefit you in the long run. As long as you plan every decision you are going to make then your life will be a lot easier. This also applies to people who are requesting for tax refund. The advantage of this is that you can get more money than the usual. A good tax planning can provide you a great monetary life.

You should practice a good tax planning all year round not just the time you are going to file your taxes. One good practice is to save receipts that may contribute on tax deductions. If know you do not practice such this may affect the way you are going to feel in the future. It is better to put some effort now than paying a large amount of money in the future no one will benefit from this but you. Another way to practice a good tax planning is to equip your self with expense tracking software. This software will help you keep track of your expenses while you are confident that you are prepared when are going to be audited just in case. Because there are some cases that regular people are audited even if there are no problems with there papers. Every year, the IRS conducts a random audit that is why any one can be audited so make sure that you are prepared when the time comes. So tax planning all through out the year will be a great advantage on your part because you do not have to worry about anything. You can show all the information that the auditor is going to need to prove that your papers are legal.

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The Minnesota Vikings official team logo is now being proudly displayed on the NFL Extra Points™ Platinum Plus® Visa® Credit Card from Bank of America.  (www.vikingscreditcard.com).   This rewards credit card has proven to be a touchdown with fans across the country and has made huge strides in the rewards credit card industry.  Like many retailers, universities and airlines have done for decades, NFL football teams, in association with Bank of America, now offer credit card consumers valuable rewards above and beyond the cool factor of having their favorite team printed on their credit cards.  These football-oriented credit cards are scoring big with sports fans in every state.

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Once you have your quote, how do go about comparing term life insurance plans? Are certain characteristics more or less important than others? What if one plan is priced better but has a slightly lower carrier rating? These are all important questions and we’ll help you not get distracted by too many variable and concentrate on what’s actually important when you compare your life insurance options.

When you run your instant term life insurance quote, usually 5-7 plans will appear in a few seconds according to your age, health class, amount of insurance, and length of term. We quote more than these carriers but according to your vital information above, these plans offered the best life insurance rates blended with the strongest carrier ratings. You’ll find that if you change term length or amount or any of the other information for that matter, then different plans, rates, and carriers will appear. Again, the system automatically recalculates to find the best rates. That’s the first part to successfully comparing life insurance plans so you have a head start.

Once the online quote is there on your screen, we really get down to the business of comparing options. The variables that we should take into account are all right there.

Term life insurance rate

Of course the first one that most people focus on immediately is the monthly rate and for good reason. Can we afford the coverage after all. Most people brace themselves for bad news only to find that term life can be quite affordable. There’s usually a sigh of relief. The rate or premium amount really is probably the most important criteria upon which to compare the plans. The carriers quoted are financially strong and there are protections by the State to protect you up to a certain amount anyway. The rate quote probably makes up 75% of the decision. Not only does the rate need to reflect your current budgeted amount, it has to work during the various financial up’s and down’s that a person usually encounters during a long period of time. Keep in mind that term life lengths can run 10, 15, or even up to 30 years. This is a long period of time and we want be able to handle the premium.

This ability to focus so narrowly on the rate is unique to term life. We wouldn’t recommend doing this with health insurance for example. There is a huge difference between medical plans options and medical plan carriers. The cheapest plans make us nervous to say the least. Term life is more of a commodity these days which means it’s very similar from carrier to carrier and plan to plan. It reminds us of dental in that respect. Yes, there are differences but not so extreme as with medical. It usually makes sense to look towards the middle to low-middle of the range in terms of price.

Within that range, it then comes down to carrier strength and ease of use. You’ll find the carrier strength right there on the page according to all three major life carrier rating agencies and their relative score (#1 rating). This is a great bonus and usually we recommend that this is a litmus test once you’ve found the right rate for your budget. If the carrier ratings are not significantly lower than the others, it passes the test.

Ease of use is a little tougher. It really makes sense to use our experience as life insurance agents on this one. The carriers are all making their way to becoming easier to deal with since the advent of the online life insurance transformation. Once you have decided on your plan and requested the application kit, we would be happy to provide guidance on ease of use when comparing term life insurance plans for your situation.