4 End-of-Life Documents and Why You Need Them?
While the majority of people would prefer not to think about the end of life, it is important to discuss the need for and understanding of end-of-life planning documents. What are these documents and why do you need them? Read this blog post to learn more.
Most of us aren’t keen to think about the end of life–especially our own. But discussing the need for and understanding end-of-life planning documents is important for all of us. So, what are these documents and why do you need them? Here’s a summary:
1: Durable power of attorney. This appoints another person to transact business, legal and financial matters for you until you die.
Why do you need it? Let's say you are incapacitated by an accident or illness, it allows the person you’ve chosen to act for you—and quickly. That can help you avoid a lot of problems, including hard-to-get guardianship and conservatorship rights. (If you are unsure of what either of these two terms means, this article makes it clear.)
2: Appoint a health-care representative. As with the first document, this allows someone to act on your behalf to make health-care decisions if you’re unable. It allows them to review health records, authorize admission to or discharge you from a hospital and make decisions about life-sustaining medical procedures.
Why do you need it? You’ll have peace of mind knowing that your wishes will be fulfilled as you intended, especially when it comes to life-sustaining medical procedures. It also helps avoid family arguments about who should have the final say.
3: Advance care directives or living will. This puts in writing the decisions you have made about your health care—instructions, if you will, for your doctor—so that your wishes are followed if you are unable to articulate them.
Why do you need it? It ensures, for example, that you receive the treatment you’ve decided on beforehand if you are terminally ill or permanently unconscious. It helps make sure that the treatments you receive in a terminal or permanently unconscious situation are in keeping with your wishes and provides guidance to your health-care representative.
4: A will or revocable living trust. This puts in writing who will inherit your assets when you die, and in what manner. These two documents can help eliminate, avoid or postpone taxes that are payable when you die. An attorney can help you decide which of these documents is better for you.
Why do you need these? If you do not have a will or a revocable living trust, basically the government will be able to decide how and to whom your assets are distributed, and it may not be to those you intended.
These legal documents require the guidance of a qualified legal advisor to ensure they meet the requirements of your state of residency, and if you already have these but have moved to a new state, they should be reviewed to ensure they comply with the laws of your state.
SOURCE: Feldman, M. (10 December 2019) "4 End-of-Life Documents and Why You Need Them?" (Web Blog Post). Retrieved from https://lifehappens.org/blog/4-end-of-life-documents-and-why-you-need-them/
4 Things Life Insurance Is Not
What is life insurance? People often get confused about what life insurance is and what it is not. Read this blog post for four things life insurance is not and a few tips on understanding them.
Are you confused about life insurance? I don’t blame you. When I first started writing about finances more than a decade ago, my understanding of life insurance was limited.
I knew about life insurance because it was offered through my employer, and I thought a $50,000 policy was a lot of money. I also recognized insurance company names from late-night TV commercials and the occasional bit of junk mail.
I understood “insurance” to be that stuff that you had to have for your car, your home, and your health. The “life” part was a big, blurry blob of “other.” If that’s how you’re feeling, here are a few tips that might help bring things into focus—by understanding the “nots.”
1. Life insurance through work is generally NOT enough. Since learning this myself some years back, I’ve noticed that many people never explore life insurance past what is offered through their work. Policies through work are a great benefit to have, but are usually limited to one- or two-times your salary or a fixed amount like $50,000. Plus the coverage typically ends when your employment there does.
How far will an amount like that go when you consider what’s left behind for your loved ones: the loss of your income and mostly likely debts and bills. What about things like rent or mortgage, child-care and education costs?
An easy way to get a working idea of how much life insurance you need is with a Life Insurance Needs Calculator from a neutral source like www.lifehappens.org/howmuch.
2. Life insurance is NOT a luxury item. Many people have not even considered buying life insurance because they’re convinced it’s a luxury. In a recent study by Life Happens and LIMRA, consumers thought the cost of a 20-year, $250,000 level term life insurance policy for a healthy 30-year-old was three times higher than it generally is. Younger people, in particular, overestimate the cost of a term policy by a factor of five.
If you took a guess at what that policy above would cost, what would you say? It comes out to about $13 or so a month for that policy. Definitely not a luxury—most of us spend more than that on a meal out.
3. Life insurance is NOT just about covering funeral expenses. While covering funeral expenses is very important, and a major reason people purchase it, life insurance does so much more. If something happens to you, life insurance benefits can help replace lost income, or pay off a mortgage, or help ensure a college fund or safeguard a retirement nest egg.
The proceeds of a life insurance policy are generally tax-free and can be used for anything your loved ones may need now and well into the future. Amazing, right?
4. Life insurance is NOT just for really healthy people. Granted, life insurance is less expensive the younger and healthier you are but don’t discount it just because you’re not in triathlete shape!
Many people don’t considering buying life insurance because they think they won’t qualify. But when certain health conditions, such as diabetes or high blood pressure, are under control with a doctor’s guidance or medication, it’s often possible to qualify. You may even be able to get coverage after a heart attack. Just know that it is probably best to work with an experienced insurance agent if you are concerned about a health issue and qualifying for coverage.
Now, if you’re a bit overwhelmed with this information and perhaps don’t know where to start, just know that a life insurance agent will sit down with you at no cost to go over your needs and help you get life insurance coverage to fit your budget. If you don’t have an agent or advisor, go here for suggestions on how to find one. You can also tap the Agent Locator there to find someone in your area.
Remember, the right agent or advisor can help you make sense of the confusion and get you on track for the financial future you want—with the protection your loved ones need.
SOURCE: Mosher, H. (30 October 2018) "4 Things Life Insurance Is Not" (Web Blog Post). Retrieved from https://lifehappens.org/blog/4-things-life-insurance-is-not/
Denied Life Insurance? Here Are Your Next 3 Steps
Were you denied life insurance coverage? Many applicants who fall into the “impaired risk market” understand they're up against a hurdle or two when applying for life insurance, but it doesn't make it any easier when they're denied coverage. Read this blog post for the next steps you should take after being denied life insurance coverage.
It’s tough to learn that the life insurance company you applied to will not be offering you coverage, especially if you were fully expecting a yes!
You may fall into the “impaired risk market,” which means you have something in your background that makes you a higher risk for dying prematurely—think things like diabetes, obesity, a previous cancer diagnosis or even a history of DUIs.
While many applicants with this type of history understand they’re up against a hurdle or two, it’s not any easier to be denied life insurance coverage. But, often times, it doesn’t mean the hunt for an approval is over.
There may still be options, which include applying to a more suitable company or applying for a different policy type.
Here are three actionable steps you should take if you’ve been denied life insurance.
1. Collect information. Before an insurer denies an application, they collect lots of data from several sources to evaluate your risk. If the risk is high enough, you are either rated, postponed or denied. In any of these circumstances, requesting more information on the reason for denial is your right.
Upon request, the carrier can provide detailed information on why an applicant is declined, whether it was due to medical history, current exam results, driving record or something else. Denials from current exams tend to be the most shocking, as you may not know about an illness or disease beforehand.
2. Confirm the results. Errors can happen. Wires can be crossed. Double check the data that was provided to the underwriter. If poor exam results were cited as the cause, confirm it with your primary care physician. In some cases, a company may simply deny coverage because of new, undiagnosed lab results, even if there is little cause for concern.
In other scenarios, you could be denied for occupational or recreational hazards, criminal records and even financial distress. Having records such as these, which aren’t updated or detailed enough, can lead to postponement or declines because the underwriter simply can’t assess a proper risk profile.
3. Work with an agent. Even with proper research, the first company you apply to isn’t always necessarily the best. Passing along detailed information to an agent can allow them to search into better options. A well-trained high-risk life insurance agent can assess information thoroughly and find a better fit for you.
But you also need to understand that applying to another carrier is an option only if the reason for denial (such a diabetes) is one another may accept (because your diabetes is under control with medication). Each life insurance company adheres to its own set of underwriting guidelines, meaning identical applications to separate carriers could yield different results.
If the root cause for denial is too great, a different type of life insurance policy altogether may be the last resort. Utilizing “graded” or guaranteed products make life insurance possible for those with pre-existing conditions or unfavorable risk profiles. While they cost more and typically come with maximum death benefits, they can be a solution.
Saving in the Long Run
After being approved for life insurance, keep an eye out over the next few months or years. Depending on your situation, you might have options to lower your rate. Here two quick examples:
Let time pass. Certain impaired risks simply require more time to pass between diagnosis and the time of application. As medical records and follow-ups are recorded, and symptoms pass or become stable, your rates can come back down. In addition, concerns related to a driving record or criminal record may also just require a certain amount to have elapsed where the offense is either removed or settled.
Check the workplace. If life insurance is offered through group benefits in the workplace, it could end up being more affordable, based on the program offered. It could also lead to filling in coverage gaps a graded or guaranteed policy left behind.
There is no one-size-fits-all regimen to combat a declination. However, taking these steps could alleviate the stress and annoyances that make finding coverage so daunting.
SOURCE: Fisher, J. (10 June 2019) "Denied Life Insurance? Here Are Your Next 3 Steps" (Web Blog Post). Retrieved from https://lifehappens.org/blog/denied-life-insurance-here-are-your-next-3-steps/