by Sam Sentelle
Posted on September 11, 2018
‘Life Happens!’ — Thoughts on life insurance
September 11, 2018
Just about everyone has some type of life insurance, Tom Midkiff told Putnam Rotarians today. Most people should review their insurance just as they would other investments.
Conditions change, he said. And there are different types of life insurance for different situations.
“Term insurance is for a fixed period of time. “You are in effect, ‘renting’ a term policy just as you would rent a house.
“You may want term insurance to pay off a mortgage. You may use it to support the family if children are still in the house. You may want it to pay off a loan.
“Permanent insurance will be there as long as you make payments on the policy. It’s going to be there whenever you need it.
“If you want to leave a legacy to your children or grandchildren, in conjunction with estate planning. Permanent insurance is an actual asset.
“Corporations like the Miami Dolphins, Disney World, and J. C. Penney are all supported through permanent life insurance.
“Permanent life also can provide living benefits. If you become disabled, you have an asset where you can borrow from or draw down from
“Long-term permanent insurance becomes much less expensive when you grow older if you get it when you’re young.
“Just about everybody has work insurance. But make sure you are familiar with the fine print: The day my dad retired, his $25,000 became $5,000; at age 70, it became $2,500; at age 75 it became $1,000.”
The work insurance, Midkiff explained, pays during disability or illness when regular income is interrupted.
“Is the coverage you have right for you?” he asked. “What changes have come up in your life? If you need life insurance, he told his audience, arrange for it when you are in good health.
A few months ago, Midkiff was diagnosed as an insulin dependent diabetic. “At that point,” he said, “I became uninsurable.
“I encourage you,” said Midkiff, “while all of you are still healthy, look at your life insurance coverage.”
Statistics show that seven out of ten families are under-insured, he continued.
“Six out of ten families realize they are under-insured,” he said, “but they’re afraid to talk to anyone about it.
“Are your beneficiaries up to date? A Maryland teacher named her mother as the beneficiary of a policy. Thirty years later the teacher died. The mother had died earlier. The benefits went to a sister who refused to share them with the teacher’s husband and children.” Finally, he said, “Know where your papers are kept. State regulators estimate that benefits which should be paid out in death claim amount to over a billion dollars. “That’s because life insurance companies don’t know the person died, and beneficiaries don’t know where to locate the documents.”