My Stories from the Field - Chapter 2

This is the second 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.

Today I have on my mind a couple of stories related to the second big mistake people make when it comes to life insurance. The first mistake is that they don't have any life insurance, even though the family needs the protection life insurance offers, since the estate is not big enough (at least for the time being) to take care of the family in case the unexpected happens. The second mistake is that John (or Mary) has life insurance but nobody in the family knows where the policy is or what company it is through. Unfortunately, this mistake is quite common, especially in situations where all the children are grown and live away from the parents' home, and the parents are still in great shape - physically and mentally.

Since none of us can guess when we pass away, or whether we will have time to plan everything while being sick, or we might have an unexpected end, it is best to have all the paperwork in place for those we leave behind; and most importantly, let them know where everything is and who they need to contact.  If you are not sure how to keep track of your important papers and where to do it, I can share a document I created for women who want to take charge of their financial life. Please contact me via this site and let me know you want my help with this. I promise you will not receive a bunch of unwanted emails later.

While working with the life insurance company, I met a family that had recently taken care of the funeral for the grandfather of the family. Mary shared with me on that occasion that she and a cousin had been in charge of finding the life insurance policy that her husband's grandfather had had. They spent many hours in a room full of papers or all sizes and colors. This is how she learned that the elderly preserve all papers that were once important, even though they were no longer needed. The expected and much needed life insurance policy was never found.

Many years ago, one of my clients, Mary, had to deal with all the financial consequences of her mother's passing. She called me to ask how she could find out what life insurance company her mother might have had a policy with. I still remember her exact words to me, even these 10 years or so later. She said: "Knowing my mom, I'm sure she had a life insurance policy. I just cannot find any papers in her house. Is there a way to find out which company she had her policy with?"

And I had to tell her that there was no central place where this info would be listed. Sure, it seems logical to protect this personal info. However, even with providing all sort of security questions or info that nobody else can have, there is no way for a family member to find out in one place about someone's life insurance policies. The only idea that crossed my mind at the time was that she could call various life insurance companies and ask. There were 2 major challenges with her predicament: 1. she would have to spend a long time talking to each company while answering a lot of questions to prove the legitimacy of her question, while still not knowing whether she had the right company; and 2. she would never have the certainty of knowing for sure that her mother didn't have a life insurance company, since she would never call all the companies in the United States.

All this happened because Mary's mother didn't have any records regarding life insurance policies. There were no directions for Mary to follow upon her mother's death. And there were no electronic drafts by a life insurance company from the mother's bank account. At least this second element would have helped a lot with the search.

I hope these stories gave you some food for thought, maybe even some dinner conversations with your family - whether you need to tell your family where to find your documents or whom to call, or to learn from your parents and grandparents what you need to do when they pass.  I know this is not an exciting topic (it is even scary, perhaps) but I can assure you there will come a time when you are happy to have had this conversation, especially if you are the one left behind to face the passing of a loved one.

With the holidays coming up, this may be your best opportunity to tackle the subject with your family. According to the Chinese, "the best time to plant a tree was 20 years ago; the next best time is now."

Please remember this:
The best time to talk about painful things and about complicated financial things is when you have a clear mind and all your loved ones around you, and not when you are emotionally drained, or even in no shape physically or mentally to deal with final arrangements for a loved one. 

My Stories from the Field - Chapter 1

This is the first 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.

While working with the life insurance company, I met a lot of blue collar workers in Virginia, as well as some in Tennessee (on a couple of road trips for the job). One lesson that always stood out to me regarding the importance of life insurance is that people need to make sure they have policies in place before something happens to them. None of us is guaranteed tomorrow, and we have to take care of our families for when we are no longer around to do it.

A couple of instances I met people who told me stories of their neighbors who passed away and didn't have life insurance in place. I will share here a couple of those stories.

In a family the adult daughter passed away unexpectedly, and the parents started asking the neighbors for donations in order to be able to bury her. Fortunately for the family, they were surrounded by helpful people who contributed what they could, and they were able to bury her. Unfortunately, not even a month later, John (the father) passed away due to a heart attack, also unexpectedly. He also left the family without the money to bury him - no life insurance either.

The spouse and remaining children had to go around the neighborhood again and ask for help. The second time around, things were event tougher - the neighbors were also tapped out now. The neighbor who shared this story with me never knew how they managed to pay for his funeral but they saw that the expenses were kept to a minimum.

While this is an example of solidarity and it shows how great it is to have helpful neighbors, the main lesson to learn is that covering the funeral costs is not a duty that should be passed on to the family, relatives or friends, and much less the neighbors. They are not responsible for someone not being considerate and caring enough to not leave the family in a tight spot financially.

The second lesson I want to share today is from someone in the Eastern part of Virginia. She told me of a friend who was caring for her grandfather in that area, let's call her Mary. She received a call that her father had passed away - he lived in the Western past of the state. She had to make arrangements regarding her grandfather's care in order to travel across state in order to take charge of the funeral arrangements. After running across state she found out that her father didn't have any life insurance, and she had to look for ways to come up with the money.

While in the process of figuring that out, she received a call from the person she had left with her grandfather and found out that he had also passed away. She ran across state to take care of his funeral - he did have life insurance. Afterwards she had to get back to the Western part of the state to take care of her father's funeral arrangements. She had to accumulate more debt by traveling back and forth because of the situation that she was left in.

Of course there is no reason to believe this is going to happen to any one of us. However, this does happen to people. So the moral of the story is to take care of our family by protecting ourselves with life insurance. The type and the amount will vary from one person to the next, so it is best to talk to a professional that can help. What is always true, is the fact that something is better than nothing. It can all be helpful.

Please remember this: 
"Dear life insurance company, please let me know how I can return this check I received when my spouse passed away. I now have too much money coming to me from all the life insurance policies we had," said NOBODY ever.