After reading last month’s column about life insurance - rates increasing to the point that you cancel your policy or cancelling a policy because you feel you don’t have a need for life insurance - Marge called. Marge had a life insurance policy that she cancelled – or she thought she had cancelled it. Premiums were no longer being taken out of her bank account just as she requested. No premiums were being paid so no insurance, right? Not exactly.
Marge had no idea that her policy had been building up cash value. When she stopped the bank draft, she thought she had cancelled her policy. Instead of her policy being cancelled, the premiums were being taken out of her policy cash value in the form of a loan. And we all know what goes along with a loan, right? Interest. Her cash value was eaten up and the policy terminated. Marge always thought a life insurance “for someone her age” or a “final expense life insurance policy” was to pay for funeral expenses and outstanding medical bills. Since her funeral is paid for and her Medicare Supplement should cover her medical expenses, Marge thought there was no need for a life insurance policy. What changed? Marge is now the proud owner of a new roof! Yes, $12,000 later she has a new, pretty roof – not exactly in Marge’s budget or financial plan. There was no damage that her homeowners’ policy covered; it was just an old roof. In addition to that unexpected $12,000 bill she received a notice about her personal property and real estate taxes due in 2019. Oh, my! If she died before those bills were paid, where would the money come from to pay them? And she still has monthly bills – utility bills, credit card balances. Plus commitments she wants to keep – giving to her church, her favorite charity. The new roof made her think about what other routine maintenance might be needed while her house is being sold – taking care of the yard, what if the hot water heater needs to be replaced. Now she realizes she needs and wants a small life insurance policy. Not a large amount but something to pay all her outstanding bills. Marge said she wants her friends to remember the many adventures they had together NOT by the last thing they had to do – figuring out where to get the money and writing the check to pay for her new roof! Marge is lucky. Even though the premium on her old policy was small, she is still able to get a small life insurance policy with a monthly premium that fits in her budget. And the best part is that she was able to save money by lowering her homeowners’ premium. The money she saved was enough to pay for her life insurance policy! Share your story – you may have a happy ending like Marge did. Call me at 501-868-6650 and say “Caroline, can we talk?”
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AuthorCaroline Beauchamp specializes in personalized life and health insurance solutions. Archives
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