How will your loved ones  – know why, for what. and for whom –  you purchased life insurance?

 

Whenever I receive a call from a beneficiary about a loved one that has passed away, they call, give me the details, we talk about what is needed to file a claim. And then they wait for the deposit into the respective bank account.  That is it.  A very matter of fact affair. Though I may have had a very close relationship with the client, usually, to the beneficiary/estate,  I am a stranger. And with privacy laws as well, the beneficiary,  is left to determine or guess the intentions of the client.

 

All the thought and planning that went into it why the client purchased life insurance, is left unsaid.

 

When I sit down with a client, we discuss thoroughly what they would like to cover.  Whether it is last expenses, mortgage, income loss or more.  And clients purchase life insurance because they do not want their loved ones to suffer financial hardship, or because they want to tidy up their financial affairs, i.e. pay off debt, pay off taxes and pay off final expenses.

And so all the reasons for why the client purchased the insurance, the thought and planning that went into it – that they loved and cared for the beneficiary, or that the insurance was to be applied toward the client’s debt or final expenses, is left unsaid.

And more often than not, the beneficiary, perhaps an adult child, or a spouse, does not know exactly why the insurance was purchased and why they were named beneficiary.  Particularly if someone has passed away suddenly and unexpectedly.

And lets face it.  Life insurance and wills are usually such a private affair that many people take care of it – but don’t talk about it with their family.

 

So how will they know?

 

This is particularly important when someone has a named beneficiary in a policy.

Often, people have named beneficiaries as the beneficiary of a life insurance policy, such as a child/children or a spouse.  This is to bypass the estate.  This means the insurance money will go directly to the beneficiary   People do this so they don’t have to pay estate fees, such as probate on the proceeds.  And also so that the cash is there immediately, and not delayed by the lengthy process of settling an estate.

The beneficiary may not realize that the intent was not as a legacy, but meant to pay off final expenses, and debts,  of the client.  And then, the family may be surprised that there is not enough money in the estate to handle those expenses.  Even though the client, in their mind, had made the family member the beneficiary to actually ensure that the money was there, if the beneficiary is unaware of this, then all the good intentions may be misunderstood.

So how will your intentions be known?

 

Leave a Love Note.  Or a legacy note.

 

Attach your love note to the policy contract, which should be in a place easily found. (Do not put your policy in a safety deposit box – which is a subject I will tackle in another post).

In the note, explain why you have the insurance, for what it is for.  And tell them you love them.

 

Your life insurance policy is meant to last a very long time.

 

Your policy is meant to last a very long time, perhaps a lifetime. Decades.  And so this Love Note may be discovered 20, 30 40 years from when you wrote it.  Or it may be just a short time. Either way, the impact to your loved ones will be great and treasured, for always.

Imagine how a child/children or spouse would feel, when coming across the policy. and there is a note, written just to them. Explaining how you felt and why you did it.

It doesn’t need to be complicated. Or long. But the impact of that note would be felt forever.  It would be “Mom or Dad” cared and wanted us to know, or spouse Bob or spouse Sally looked out for us.  Or ‘Mom was a very independent person and wanted her affairs to be settled easily, so she did this”.

 

 Do it as soon as you receive your life insurance policy.

 

And do it as soon as you have received your policy.  This is when the reason why you purchased it is freshest.  If you put it off, it is possible it will not get done at all, or when you go to do it, the many reasons are forgotten or faded.  Your life insurance policy is meant to be there a very long time. So leave your Love Note as soon as you receive your policy.

Your Love Note will be a family treasure, and your wishes will be known.

Best Jane