You don’t buy life insurance every day; it’s something you may do once or twice in your during your lifetime. Here are some invaluable pieces of advice for buying life insurance that can make your life, and that of your loved ones, much easier.

Don’t name a minor child as your life insurance beneficiary.
The main goal for getting life insurance is to provide for your children in case you’re not around anymore. The problem is, minors cannot receive the life insurance money directly. The life insurance company can tie up the money until the child is 18 years old. And then, that 18-year-old will get the money, with no control.

There have been numerous cases where these barely legal teens get considerable amounts of money from life insurance and they lose it all pretty quickly on things like drugs, alcohol, rehab for addiction, etc.

The best way to go about it is to create a life insurance trust that receives the money and also tells how the money should be used. Moreover, you can leave directions for the trust to release the funds to the beneficiary at certain ages e.g. 21 years, 25 years, 30 years.

Don’t let your former spouse use group life insurance to fund a divorce settlement.
If, according to your divorce agreement you are entitled to receive alimony or child support, you should make sure that it stipulates life insurance on your ex-spouse. If you don’t, you won’t have that money coming in, in case your former spouse passes away.

However, it’s not a good idea to use group life insurance. It’s better to use term life insurance as its cheaper and it doesn’t hang on a job. In today’s economy you can’t ignore the chances of changing jobs or simply going out of employment.

Keep the following in mind:

- The person buying the life insurance can set the policy’s term to be equal to the number of years of child support or alimony.
- If you are a beneficiary but don’t control your former spouse’s life insurance, the divorce agreement should specify that the policy still maintains you as “a party of interest.” This way you will be notified in case payments stop.
- Be mindful of disability insurance for an ex-spouse. If your former spouse can’t work due to a disability, s/he can go to court for a reduction in support payments.

Make sure your life insurance policy has ‘living benefits’.
Living benefits let you access, under certain circumstances, the death benefit money even while you are alive. This can be crucial in case you become seriously ill and need the money for living expenses or medical bills.

Add some payment to your life insurance application to make the policy binding.
It can take weeks for life insurance applications to be processed. And coverage only begins after the processing is complete. To have your coverage start as soon as you apply, submit a check for the first payment with your application.

This will bind the coverage retroactively to that day. So in the off chance you die before your processing of your policy is complete, your family will have the financial safety you intended to give them with the policy. Have additional questions about your life insurance policy or need help setting one up? Give our insurance agency in California and Nevada a call today (760) 471-2200.

Posted 11:22 PM

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Kipper Insurance Agency of California, Nevada & Arizona
Carlsbad, CA 92009
Phone: 760-471-2200
Fax: 760-856-4071
License#: 0E67716

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