Monday, October 22, 2018

My Stories from the Field - Chapter 4

This is the fourth post in a long sequence where I want to share stories of real people I have met either while working with a life insurance company, or as an independent investment adviser. My goal is to share their stories so I can impart the lessons I learned in the hopes that these lessons will also serve others - this is for you, my readers!
*All my subjects will be either John or Mary, for privacy reasons.

I was thinking about a couple of my clients today. They have been my clients for over 10 years now, and I still remember them; not for the fact that they (like many others) have life insurance policies on themselves and their immediate families, but for the fact that they have purchased life insurance policies through me to protect family members whose funeral expenses they would otherwise have to cover - in these cases siblings, adult siblings. 

Mary has a brother who has never been married, nor has any children. While she is married and has grown-up children of her own, she understands that she will still have to deal with any final arrangements for her brother when the time comes. Knowing that she will be responsible for the final expenses, she made the decision to purchase a life insurance policy with her brother as the insured.

John had been for a couple of years when we talked about his sisters and brother, and how he is the best off, and expected to take charge of any final arrangements when anything happens. Out of his 4 siblings, only one has a grown child, while the rest have no spouses, nor children. John feels that he should have coverage in place for his siblings because they have not taken care of it themselves, and he knows they will look to him to take charge of the expenses when one of them dies. Even with a spouse with special needs, John feels it will fall on him to take care of the final arrangements for his siblings if they pass before him. So he chose to pay under $200 per month for all 4 of them, in order not to have to come up with the entire amount to cover the funeral expenses.

Mary has a sister who has never been married and has no children. Mary is now retired and has an income that allows her to live comfortably, while her sister never really had a steady job. She decided to make sure her sister has life insurance in place, so that she wouldn't have to borrow money for the funeral, should her sister die before her. She also made arrangements with her adult daughter to take over the policy, in case she predeceases her sister; she knows her daughter would be left to take care of the aunt. 

In these cases (as in many others), it is easier for the sibling who will have to be in charge of the final arrangements, to pay a small amount every month - usually (at least for my clients) under $50 per month - rather than come up with $10-12,000 for the funeral. This is how much a funeral costs now in the Richmond, VA area for an average funeral - not the cheapest, but certainly not fancy. These particular policies are not meant to make the surviving sibling rich by any means, they are simply meant to provide enough money to cover final expenses. In the examples above, the coverage is of around $10,000 on each person.

Please remember this:
Dinner conversations about funeral expenses may be uncomfortable but they can bring peace of mind. If you find out your siblings or parents have no money or policies to cover final expenses, you may want to consider purchasing life insurance on them - unless you can cover the expense from other sources.

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