| Mistake 1: |
YOU NAMED YOUR
ESTATE AS BENEFICIARY |
| |
By naming your estate as your life
insurance beneficiary, you have created many potential problems.
If the beneficiary you have named predeceases you and there
is no back up beneficiary, or if you have deliberately named
your estate as beneficiary, your beneficiaries will probably
wish you had better advice.
|
| Mistake 2: |
YOU
FAILED TO NAME AT LEAST 2 “BACK-UP” BENEFICIARIES |
| |
If the beneficiary you named dies before
you do and you do not make a later change, the proceeds will
be paid to your estate. This needlessly subjects it to all
the problems of Mistake 1.
|
| Mistake 3: |
YOU FAILED TO CHECK YOUR POLICIES
AT LEAST EVERY THREE YEARS |
| |
All
too often after someone’s
death, it is found that life insurance proceeds are payable
to the insured’s ex-spouse.
|
| Mistake 4: |
YOU HAVE NOT MATCHED THE PRODUCT
TO THE PROBLEM
(You have got the wrong type of life insurance) |
| |
If you have a contract that may
run out when you need it the most, you forfeit one of the
most
important benefits of buying life insurance: peace of mind.
|
| Mistake 5: |
THE AMOUNT OF YOUR COVERAGE
IS INADEQUATE TO MEET YOUR FAMILY OR BUSINESS GOALS |
| |
Inadequate
capital to produce the income to provide for your family’s
food, clothing, shelter and educational needs.
|
| Mistake 6: |
YOUR POLICY IS PAYABLE OUTRIGHT
ON YOUR DEATH TO CHILDREN OR GRANDCHILDREN |
| |
The wrong asset is going to the wrong
person at the wrong time. By paying your children, your spouse
may need these funds. Additionally, your children, if minors
or of a young age, may not be able to manage these funds.
|
| Mistake 7: |
ALL THE INSURANCE ON YOUR LIFE
IS OWNED BY YOU |
| |
You are subjecting your estate to unnecessary
estate tax liability. For federal estate tax purposes, life
insurance which you own is included in your estate. One possible
remedy is the establishment of an Irrevocable Life Insurance
Trust to own the policies.
|
| Mistake 8: |
YOU HAVE NOT CHECKED TO SEE
IF YOUR BUSINESS OR PRACTICE CAN PROVIDE INSURANCE ON A
MORE TAX-EFFICIENT BASIS |
| |
It may be costing more than it should
if you are paying for life insurance entirely with after-tax
personal dollars.
|
| Mistake 9: |
TERM INSURANCE RUNS OUT AND/OR
BECOMES PROHIBITIVELY EXPENSIVE |
| |
If the policy you own never accomplishes
your objective(s), it is prohibitively expensive, no matter
how low the annual outlay!
|
| Mistake 10: |
YOU PURCHASED LIFE INSURANCE
AS THOUGH IT WAS A COMMODITY |
| |
There are many mistakes that can make
life insurance less valuable and many tips and techniques
that can vastly enhance its effectiveness.
|
