4 Things to Do After Buying Life Insurance

1. Discuss It

While life insurance is personal, it’s something to discuss with your loved ones. Indeed, use your discretion and judgment, as there may be individuals you feel should not know. If you have an executor, they should be aware of your plans, and often the beneficiary is informed. Your loved ones can’t be protected if they don’t know the protection exists.

Typically, beneficiaries, who will receive a life insurance payout, are asked in advance as part of your planning process.  If you haven’t previously discussed it, you should tell them now. By being open and transparent about your plans, you can provide them with essential information so they know how they are protected and where to locate documents in the event of your passing.

2. Safely Store Your Documents

Keeping your life insurance and other end-of-life planning documents safe is critical. Make copies of the originals in case they are lost or damaged. Be sure to store the original and copies in two or more different places so that if something happens that destroys copies in one location, you have a backup elsewhere.

Storing at Home – There is always the risk of documents being destroyed by fire or other natural disaster. Keep records in a fireproof/waterproof safe or chest.  Just be sure your executor has the key or combination in case they need access. But be sure to find a way to store documents off-site, too.

Storing in a Safe Deposit Box—This is a traditional way that people have chosen to store documents and valuables off-site; however, even if your executor has a key and is authorized, a bank may secure the box after your death and require a court order to open it.

Digital Storage—Keeping digital copies can be a wise option. Scan your policy and other documents and keep them on your computer. You may want to back them up to an external thumb drive. Online storage resources like Dropbox, Google Drive, and others provide offsite storage for essential documents in case your computer fails or is damaged. Just be sure there is a way for your executor or other trusted person also to know how to access documents.

3. Leave Instructions…Leave a ‘Paper’ Trail

Leave written instructions about what to do in the event of your death.  Some refer to this as a “love letter” to your family and loved ones. Clearly outline with detail what steps need to be taken upon your death, including:

• Where necessary paperwork is stored and how to access it if passwords or keys are required.
• Describe the documents and what to do with them, including details they will need.
• Provide contact information.

If you need help preparing such a document, ask your insurance agent, accountant, or legal advisor for assistance. This guidance will help your executor/family navigate more easily during an emotional time.

Other future planning issues to consider include having an up-to-date will, health care proxy, power of attorney, and other legal documents. If you haven’t yet made such preparations and don’t already have a provider you trust, please let us know. We can provide you with a list of options.

4. Don’t Just File and Forget It

While you may be set for planning for the moment, your life is constantly changing.  If you change jobs, have a child, move to a new home, enter a different stage of life where kids are grown, etc., your needs can change, requiring updates to your life insurance plan.  Issues to keep in mind:

Beneficiary Changes—Various Life Events can result in a decision to change your life insurance beneficiary. Your insurance company needs to know your intentions so that the loved one(s) you want to protect receive insurance funds.

Moving – Update your insurance agent with your current contact information.  It is essential to ensure that premiums are paid on a timely basis so that your policy doesn’t lapse or if any other issues/opportunities arise.

Policy Review  – It’s wise to talk to your agent every three years or so.  Together, you can discuss anything that may have changed and review your needs to ensure your current policy is still the best fit for you. There might be different policy options, or you need to change coverage amounts. If you become disabled or have financial challenges, contact your agent, as your policy may have options that can assist you depending on how it is structured.

Taking the extra time now and then to consider your plan helps ensure your loved ones stay adequately protected. Please Contact Us at Murphy Insurance.