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What You Need to Know About Life . . . Insurance

When asked what I like most about my job, my answer is always the same: I am always challenged and always learning.  I recently learned a few things that you may want to be aware of. 

Life Insurance and Divorce

Illinois enacted a new law to help protect those clients who get divorced and forget to change their beneficiary on their life insurance, annuity contracts and qualified accounts.  We had a situation where the ex-wife remained the beneficiary on her ex-husbands policy.  She filed a claim and was told by the insurance company she was not getting the money, his current wife would.  This law took effect at the start of 2019.  If you want to maintain your ex as primary beneficiary, you must refile the arrangement with the insurer post-divorce.  Do you work with clients in IL?  Perhaps your state has or will pass a similar law?

The other part of the situation is the ex-husband was supposed to carry coverage for the benefit of his children from the first marriage.  With legal assistance the ex-wife can still likely make a claim against the policy on behalf of their children.  Did you know that one spouse can now purchase life insurance on another spouse without them knowing it?  A court order or a divorce decree must be in place to do this.  Had the ex-wife been aware of this new law, she could have protected their children with life insurance and the ex-husband would not have even known she purchased coverage on him.  In addition to working with many well-known insurance companies, we work with specialty firms to help with unique situations like this.  This is certainly something to be aware of when working with client’s who have or are going through a divorce to assure their policies/accounts are in order post-divorce.

Life Insurance Policy Locator

Insurance is often purchased during life changing moments: a new baby, marriage, the purchase of a home or the addition of other assets worth protecting. But if policy documents are lost you may find yourself searching for a missing policy. That can be difficult if the agent cannot be located or the company holding the policy has changed.  The search for answers can seem overwhelming. Luckily, the National Association of Insurance Commissioners (NAIC) has a national life insurance policy locator , linked with major participating insurers, to help you find a life insurance policy or annuity contract.  This can certainly be a valuable tool when settling estates.

NAIC Tips on Finding a Life Insurance Policy
NAIC Life Insurance Policy Locator Link

Life Insurance Ownership & Beneficiary Designations

Insurance contracts are legal documents that come with both ownership and beneficiary concerns.  We recently had a situation where a contingent owner on the policy was important to protect all parties.  Launch the below resource addressing a multitude of factors a policy owner should consider when making their beneficiary designation.

BYA – Beneficiary Designations

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The information contained on this website is provided "as is" and does not constitute legal, accounting or tax advice. We are not acting as your attorney, accountant or tax professional. We encourage you to contact the appropriate professional for legal and tax information pertaining to your specific needs and circumstances.
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