Brian Gruss Licensed Insurance Planner

Revisit Your Life Insurance Needs Annually

How long has it been since you last reviewed your life insurance coverage? If you are like most, chances are you long ago filed your policy away and haven’t thought about it since.

But life is not static, and circumstances do change. Major life changes such as marriage, the birth of a child, the purchase of a new home, or even an increase in salary can shape how much financial protection you and your family needs.

Even if a year goes by without any major life events, it’s still a good idea to review your coverage. The amount of your life insurance coverage should be sufficient to meet the current obligations and future needs of your loved ones. If you have taken advantage of historically low interest rates and recently refinanced, make sure you have enough coverage to satisfy your new loan obligations. If you’re single, consider the cost of a funeral, outstanding medical bills, credit card balances and ongoing financial assistance for elderly parents who may be dependent upon you.

And while you’re reviewing your coverage, it’s also a good idea to confirm that your current beneficiary elections are still accurate.

If you’re uncertain whether your current coverage is meeting your family’s needs, contact us for a needs analysis to provide you the peace of mind that your family will be taken care of should the worst happen.

Tags: Beneficiary, Circumstances, Contact, Credit Card Balances, Current, Elderly Parents, Elections, Financial Assistance, Increase In Salary, Insurance, Insurance Life, Life Changes, Life Insurance Coverage, Loan Obligations, Low Interest Rates, Marriage, Medical Bills, Peace Of Mind

Disability Definition Is Key in Determining Eligibility for Benefits

It pays to be an educated consumer, especially when it comes to understanding your disability income insurance. The best way to learn about your coverage is to read your policy’s fine print.  Here you’ll find such details as benefit amounts, any exclusions that apply and the criteria necessary to be considered disabled by your insurance company. Arguably, this definition of disability is the most important aspect of your policy because it will govern whether you qualify for disability benefits at the time of need.

The most basic definition of “disablity” is the inability to earn income due to sickness or injury. However, different insurers break down that broad definition into more specific circumstances:

• Own Occupation – Defines disablity as the inability to handle the fundamental duties of your own occupation. This means you can be considered disabled and receive benefits while working at another occupation. Rates are highest for this type of policy and generally this coverage only makes sense for individuals employed in highly skilled occupations such as surgeons, dentists, trial lawyers, etc.
• Modified Own-Occupation – The most common definition found in policies written today. Pays benefits if you are unable to perform the substantial and material duties of your occupation and are not working in another occupation.
• Any Occupation – A policy of this type defines disability as the inability to perform the duties of any occupation. Qualifying for benefits means you must be completely unable to handle working at any job.
• Combination (Short-Term Own Occupation Coverage) – If you purchase this type of policy, you will receive own occupation coverage for a set period of time, generally two years. When that time period lapses, you must show that you are unable to perform the duties of any occupation to continue receiving benefits.
• Presumptive Total Disability – There are certain catastrophic conditions that automatically render you totally disabled in the eyes of most insurance companies, regardless of whether they were caused by injury or illness. They include the loss of sight in both eyes, hearing in both ears, speech, the use of both hands, the use of both feet, or the use of one hand and one foot. Becoming disabled by one of these conditions not only entitles you to receive immediate benefits, but it also allows you to receive benefits even if you are able to resume working.
• Residual Disability (Income Replacement Coverage) – This type of coverage pays benefits if you are able to work part-time, but your income has decreased as a result of your disability. The benefit amount is calculated by determining the percentage of your current part-time income in relation to your former full-time income. Some insurance companies require a period of total disability before you are eligible to receive residual benefits.
• Partial Disability – This coverage also pays benefits if you can perform some, but not all of the duties of your occupation.

In addition to understanding your insurer’s definition of disability, you should also know whether your policy provides a reduced benefit if you receive benefits from workers’ compensation, Social Security, or other government programs.

Disability income insurance can be instrumental in helping a disabled person and his or her family maintain some quality of life economically if they are unable to work. But policies are all legal contracts that need to be understood prior to the time of need.

Tags: Benefit Amounts, Circumstances, Dentists, Determining Eligibility, Disability Benefits, Disability Income Insurance, Disability Insurance, Disablity, Exclusions, Fundamental Duties, Insurance, Insurance Company, Job, Occupation, Period Of Time, Skilled Occupations, Time Of Need, Time Period, Trial Lawyers

Getting a Divorce Doesn’t Mean Saying Good Bye to Your Life Insurance

Getting a divorce means making changes. Just about every aspect of your current lifestyle will be altered, and your life insurance needs are no exception. However, just because you’re getting divorced doesn’t mean you should drop your life insurance altogether.

If you and your ex-spouse don’t have children, and there isn’t anyone else relying on you for support, you probably won’t need as much life insurance as you did when you were married. But there are instances in which getting a divorce actually increases your need for life insurance, such as when:

• You are the parent of dependent children, and you must contribute to their support.
• The court approves a divorce settlement that requires you to carry a certain amount of life insurance with your ex-spouse as the named beneficiary, the proceeds from which will be used to support your children in the event of your death.
• The coverage you previously had is terminated as a result of the divorce.

In addition to revisiting the amount of life insurance you carry, you may also want to change your beneficiary. If your ex-spouse is the named beneficiary on your life insurance policy, and you plan on changing that designation, be sure you remain in compliance with your divorce decree. If your settlement agreement requires that you maintain your ex-spouse as the beneficiary of your life insurance, you cannot legally remove them.

Keep in mind that if your ex-spouse was designated as your beneficiary when your purchased the policy, getting a divorce doesn’t necessarily alter that. There are some states in which divorce automatically invalidates the ex-spouse as the designated beneficiary. However, don’t assume you live in one of them. Talk to your attorney and verify it.

Another point to remember is that specifying a change of beneficiary in your will doesn’t supersede the beneficiary designation stated on your life insurance policy. The only way to remove your ex-spouse as your beneficiary is to execute a change of beneficiary with your insurer. Your insurance agent can help you with the necessary paperwork.

If you do change your beneficiary, don’t name a minor child. Insurers will not pay the proceeds from a policy directly to a minor, and the probate court may require that a trust be established, and a guardian appointed, to manage the proceeds from the policy until the child becomes an adult.

If you are a recent divorcee, you should talk to Brian Gruss about evaluating your situation and recommending products that suit your current needs.

Tags: Beneficiary Designation, Compliance, Current, Dependent Children, Divorce Agreement, Divorce Decree, Divorce Settlement, Getting A Divorce, Instances, Insurance, Life Insurance Policy, Lifestyle, Proceeds, Settlement Agreement