Naming and Changing Insurance Beneficiaries
Most People know that a Life insurance or Annuity policy allows a named beneficiary to receive the proceeds upon the passing of the insured or annuitant. However, who should be named is something that deserves some attention. What if you have the wrong beneficiary listed?
Well, the simple answer is that having the wrong beneficiary can lead to unintended consequences. The Primary Beneficiary(s) will receive the proceeds upon submission of the claim after the insured’s death. The Contingent Beneficiary (s) will only receive the proceeds if the Primary Beneficiary has died before the Insured.
If you name multiple beneficiaries, you are able to select how the proceeds are distributed.
One common problem occurs when a Beneficiary dies and no Contingent Beneficiary has been named. In this situation, with a policy from a commercial insurance company, the proceeds would then go into the estate of the insured to be distributed as directed by his or her will-if she or he has one. This usually causes an increase to attorney’s fees and taxes. As a Fraternal Benefit Society, LCBA has established bylaws to help avoid this.
When parents purchase life insurance and choose to name their minor children as the beneficiaries, there are potential unintended problems that can arise here as well. If a guardian has not been provided for in a will, the court will appoint one, which brings with it fees for the attorneys and court costs. Beyond not having control of who will raise the children, this may also tie up the funds for a period of time and potentially create a financial hardship for the children. There are ways to avoid this, but they require much more space than is available in this article.
Many are insured/owners of policies that were purchased when they were young by their parents. Now 40+ years later their parents are still listed as beneficiaries even though they may be in a nursing home or have been deceased for years. It is a good idea to be sure you have current beneficiary listings to help the claims process go as you intend.
It is also good to note that the beneficiaries that you have selected can be changed if you, as owner of the policy, decide that it is appropriate. Family dynamics change over time and some circumstances do warrant making a change. Marriage, divorce, and/or the death of a beneficiary are a few examples of why a beneficiary change might be necessary or desirable.
Thanksgiving is right around the corner. It’s hard to believe that we are here again. Let’s look back to the first Thanksgiving in Plymouth Colony 1621. This was a time for celebration; the pilgrims had made it through their first winter and had a bountiful harvest the next year with the help they received from the Wampanoag Indians. Thanksgiving today is a time for families to come together and to tell stories of their experiences that year. Don’t let this holiday be overrun with cell phones and football on the television. Thanksgiving is a time to reconnect with our loved ones. With the upcoming Holiday season think back to earlier this year. Did you or someone in your life lose a loved one this year. The first Thanksgiving without a loved one will be challenging. Thanksgiving is a time for us to open our hearts, and open our tables to our loved ones and invite them in. Some people may not be in the mood to celebrate this holiday season, but this is when they need their families most. The memories created the holiday season will last a lifetime with those who share in it. Before we know it snow will be falling and Christmas lights will be shinning in the night. From all of us here at Humenik Funeral Chapel we want to extend our wishes to you and your family, have a Happy Thanksgiving.
Getting Ready for Funeral Arrangements
Over the years, the Federal Trade Commission has been placing heavy regulations on the funeral industry. It began roughly 30 years ago with the promulgation of the “Funeral Rule,” which was rightly designed to protect consumers with full transparency on pricing so you can be assured you “get what you paid for.” Unfortunately, this leaves the funeral home in a precarious position. When a family comes in, to be compliant with the letter of the law, we must provide our General Price List, Casket Price List, and Outer Burial Container Price List before we can even enter the arrangement room. We feel this to be a rather cold “welcome” to our facility. So please bear with us as we comply with these ever more strict regulations. That’s part one.
Part two is Pre-planned and Pre-paid funerals. When an individual comes in and makes selections of funeral services and merchandise with no signatures, that document is nothing more than a price quote based on the GPL of the day. Pre-paid funerals have an important caveat that often is forgotten during the interim from when the arrangements were made and the death occurs. That is when a funeral is fully funded, guaranteed, and irrevocable, ONLY the services and merchandise dollar amounts are guaranteed not to increase, e.g. Visitation charges and casket charges. A third section called Cash Advances; items such as death certificates, flowers, church gratuities and catering are not guaranteed, but are subject to the prices of the day. This quickly becomes a point of contention between the family and the funeral director. “Everything is paid for!” is the usual response. We hate to sound like politicians, but the answer is yes and no. The prices for Our Services and Merchandise are guaranteed. Cash Advances are not. That’s the bad news! The GOOD NEWS is that pre-planning and pre-funding can indeed save you a lot of money, and remove a heavy burden from your remaining family members. We understand that money is tight these days, but the sooner you fund the funeral, the greater the future savings will be. Obviously, a healthy 30 year old has other things on his or her mind than death. But if you’re retired, or doing some financial planning for your future, a pre-planned pre-funded funeral is the way to go. So many families come to see us when a death has occurred and don’t have the first idea of how they’re going to pay for the funeral with which they want to remember their loved one’s life. Depending on your age, just a few dollars a day on a 10 year plan (with early payoff discounts), will provide the funeral you want, for a price you can afford.
Part three is Medicaid spend downs. To qualify for Medicaid in case of the need for a nursing home stay, there are several asset restrictions, both in the present moment and the past 5 years. A pre-funded funeral is a perfectly legal way to set aside money for your final expenses (a funeral), that cannot be taken away from you by Medicaid. There are other restrictions as well, but for the purpose of this article the message is, if there’s a nursing home anywhere on your radar YOU NEED TO CALL THE FUNERAL HOME BEFORE YOU CALL AND APPLY FOR MEDICAID. Once you’ve applied for Medicaid it’s too late. That money is gone like a 9th inning home run over the left field wall. So be informed, we’re here to serve you and to make life a little easier for your loved ones as well. We’d be glad to answer any questions you have.
HAVE THE TALK OF A LIFETIME
You talk about everything. You share the big events and small victories. But there’s one conversation you probably haven’t had: it’s time to have the talk about how you want to be remembered. It can make the difference of a lifetime.
Sharing stories with those who matter most isn’t just important today; it will be especially significant when it’s time to commemorate a life. These discussions can help families make important decisions about how they wish to remember and honor the lives of their loved ones.
Through meaningful memorialization, that is, taking time to reflect on the unique life of a loved one and remember the difference they made, families and friends take an important step in the journey toward healing after death.
Bronner’s Christmas Store – Frankenmuth – Crossroads Village
Please join us for our November trip to Frankenmuth and Flint, Michigan on Friday, November 30th. With boarding at 6:45a.m, be prepared for a day trip of fun and Christmas spirit. Arriving about 11:30a.m, our first stop is at Bronner’s CHRISTmas Wonderland. They have come a long way from when they opened their doors in 1945. They are now the World’s Largest Christmas store. A must ‘stop’ for all shoppers. If you plan to stay at Bronner’s, they have a snack area where you can eat, hot dogs, pizza, brats, and soups. Not into shopping? Stay on the bus to Downtown Frankenmuth, also known as “Little Bavaria”. Stop inside the 7 gallery Frankenmuth Historical Museum only $2 admission per person. Stretch, relax, you are on your own for lunch and shopping.
Our next stop is Crossroads Village in Flint. Crossroads is the place to be for Christmas. The Village is also the home of the “Huckleberry Finn” steam locomotive. The town is set like the early 1900s with board walk sidewalks. The locals dress in “period” clothing. There are also Victorian swings and a pony cart. Crossroads Village is also known for their live entertainment and a play. We will be seeing a short Christmas play followed by a buffet dinner with Baked Chicken, Black Forest Ham, Meatball Stroganoff and much more included. After dinner, we will walk as a group to the train depot where we will ride on a steam locomotive. Our locomotive will take us through a beautiful light display, lasting approximately 40 minutes. Upon our return to Crossroads Village, there will be time to shop or relax before our bus trip back home. We should arrive back at Humenik’s about 11:30p.m. Included is transportation on a luxury motor coach, Christmas play, buffet dinner and train ride. All this for the same price as last year, only $85.00 a person. It is a sure fire way to either enjoy or join the Christmas spirt. We hope to see you there. Merry Christmas!