Whole Life Insurance In Singapore Is Important.
A relative has just died. He had a life insurance policy with you listed as the beneficiary. There’s just one problem: the life insurance policy is missing. You have no idea which insurance company wrote it.
If you find the missing life insurance policy in the future, are you still eligible to receive the death benefit?
Hope they paid their insurance bills
If you’re a beneficiary and you find the lost life insurance policy shortly after the insured dies (within six months to a year, for example), claiming the death benefit should be trouble-free.
First, determine if the insured had term or permanent life insurance. If the insured held a term policy, you’ll receive the death benefit if he died before the end of the policy term. If he died after the policy expiration date, you would get nothing.
If the insured had a permanent life policy, you’ll receive the money if the death occurred while the policy was “in force,” meaning all premium payments were made up until the time of death. If the death was a while ago, you’ll receive the benefit with interest from the date of death.
If the life insurance policy lapsed — meaning the insured stopped making premium payments before he died — there’s a chance you might get nothing. When a permanent life insurance policy lapses, most insurance companies switch its status from permanent insurance to one of two options:
“Extended term” — The insurance company uses the cash value of the policy to buy a term life insurance policy for the same death benefit using the cash value of the policy. The death benefit will continue for the longest period the cash value will purchase.
“Reduced paid up” — The insurance company will keep the policy in force permanently, but will reduce the death benefit.
Gerry Brogla, an actuary for State Farm, says in the majority of the cases at his company, the permanent policy continues as extended term if it lapses. At State Farm, extended term is the default option for most permanent policies.
If the policy lapses, and the extended-term period expires before the insured dies, the policy is worthless and the life insurance beneficiary will get nothing. If the insured dies before the extended-term period is up, the beneficiary will receive the death benefit. If the policy lapsed because the insured died (thus ending premium payments and causing the insurance to be placed in extended-term status), the beneficiary will still collect the full death benefit, regardless of when the extended term was up. The beneficiary always needs to supply the insurance company with a death certificate to verify the date of death.
There is no time limit during which a life insurance beneficiary must step forward to collect the money, according to Jack Dolan, spokesman for the American Council of Life Insurers. “If a person shows up 30 years after [the insured's] death, the company still makes good on it,” Dolan assures.
What happens if no one ever reports the death?
If the insured dies and the insurance company does not learn of the death, the policy lapses. Insurance companies will take steps to find out why a policyholder stopped making payments.
When an insurance company stops getting payments, it sends letters to the insured informing him the policy may lapse as a result of unpaid premiums. If the letters go unanswered, the company might initiate a search to find the insured. If that comes up empty, the company will then lapse the policy.
If a beneficiary to a policy never steps forward, it unfortunately means the insured paid money to a policy throughout his life and his beneficiaries never see a penny. This is why its a good idea to make sure beneficiaries are aware of any life insurance policies you have.
If you’re lucky, the state may have your money
In some cases when a beneficiary fails to claim a death benefit for several years, the money is transferred to the state where the insurance policy was purchased under the escheat laws.
If a company knows an insured died and it cannot find the beneficiary, it must turn the full death benefit over to the state comptroller’s department within three to five years of the insured’s death. The money is transferred to the state where the insured bought the policy. The money is considered “unclaimed property” and gets lumped in with dormant bank accounts and uncollected rent deposits. The comptroller’s department maintains a database that lists the names and addresses of lost life insurance beneficiaries.
Many states will try to contact life insurance beneficiaries in an effort to pay the death benefits. In Texas, for example, the names and addresses of the beneficiaries are published annually in each county in the state. In New York, the Web site of the New York State Comptroller’s Office of Unclaimed Funds has an online search to find any unclaimed death benefits owed to you. You can find out the procedures in your state by contacting the office of your state comptroller or treasurer.
Keep in mind your chances of finding the policy with the state are slim. The insurance company has no obligation to hand the money over to the state if it’s unaware the insured died. In most cases, it’s the beneficiary who contacts the insurance company.
Also, the insurer only transfers the money to the state three to five years after it cannot find the beneficiary but knows the insured died. If the state doesn’t have the death benefit, it’s likely the insurer is still looking for the beneficiary or doesn’t know the policyholder has died.
Unclaimed death benefits are rarely transferred to the state. Dave Potter, a spokesman for Hartford Life, says less than 1 percent of his company’s death benefits go unclaimed.
Del Chance, a life insurance claims manager at State Farm, says, “Turning over life policy benefits to an individual state after the death of an insured is extremely rare. State Farm utilizes their own search techniques as well as outside vendors to locate lost beneficiaries in the event of the death of one of our insureds. By and large these procedures have always located the beneficiary.
Tips for making sure your life insurance beneficiaries get your death benefit:
1. Give your beneficiaries your policy information. It can be a difficult and awkward conversation, but an important one.
2. Keep all your financial records (especially your life insurance policies) in one place. Don’t force your beneficiaries to search your house from top to bottom after you die.
Tips for looking for lost life insurance policies:
1. Go through canceled checks or contact your relative’s bank for copies of old checks. Look for checks made out to insurance companies.
2. Ask those who may have known about your relative’s finances. Speak with the relative’s lawyer, banker or accountant. Also contact the relative’s insurance agent.
3. Contact your relative’s past employers. They might know of possible group life insurance. The insured might have also purchased supplemental life insurance through work.
4. Check the mail for a year. Premium bills and policy-status notices are usually sent annually.
5. Look at income tax returns for the past two years. Check for interest income from policies or expenses paid to life insurance companies.
6. Contact the Medical Information Bureau. If your relative bought life insurance fairly recently, there might be a trail of the companies to which he applied. The Medical Information Bureau (MIB) maintains a database that might show if insurers requested your relative’s medical information within the past seven years. Record searches can be requested through the MIB’s Policy Locator Service and cost $75. The MIB says that nearly 30 percent of searches turn up leads.
Watch the video related to whole life insurance
Life Insurance is very IMPORTANT! You need coverage against death, permanent disability and critical illness. You are only being responsible for yourself, responsible for your family, responsible for your love ones, when you get life insurance. Regardless, from whichever company you get it from, whole life insurance is a MUST! Freddie Ng shares his experience on how life insurance SAVES his life. Helmi Hakim www.helmihakim.com +65 96520134
Help answer the question about whole life insurance
If a life insurance company goes bankrupt, what happens to whole life insurance benefits?My Dad purchased whole life insurance through AXA Equitable which is all paid for. What happens if the life insurance company goes bankrupt or their assets are under water like so many other financial institutions these days? Will the benefits still be payable?
I also think it's strange that he had to pay $700 more to this insurance company as an "adjustment"(?) recently even though the policy was fully paid for a long time ago. Is this normal?
About Author
Visit Insure.com for a comprehensive array of comparative auto, life and health quotes, including a vast library of originally authored insurance articles and decision-making tools that are not available from any other single source. Insure.com is dedicated to providing impartial insurance information to consumers. Visitors can obtain instant quotes from more than 200 leading insurers, achieve maximum savings and have the freedom to buy from any company shown.
No related posts.
Related posts brought to you by Yet Another Related Posts Plugin.
Posted by American Car Insurance on May 24th, 2009 filed in life insurance | 9 Comments »
Top incoming search terms for this post
best "whole life insurance in singapore" -9 Responses to “Whole Life Insurance In Singapore Is Important.”
Leave a Comment
-
Link Partner
May 24th, 2009 at 4:17 am
The best company to buy from is one that is financially secure.
The A.M. Best Company, an independent rater of insurance companies, has been rating them for over 100 years, since 1899. They assign grades to insurance companies, based on their financial strength, and ability to pay claims.
The best companies are the ones that have an A.M. Best rating of A++ (Superior), A+ (Superior), A (Excellent), A- (Excellent).
Here's my suggestion and recommendation:
http://free-best-life-insures-comparator-usa.blogspot.com/
And compare life insurance company at your place
May 24th, 2009 at 4:18 am
Basically insurance only works when a large groups of people own that particular insurance. Everyone pays to protect their income, but not everyone is going to use their insurance. So that's how basically insurance companies stay in business, unless something extraordinary has happen in this country where there's lots of people are filing for claims and the insurance company can't pay them all (such as the Hurricane Katrina event).
What is whole life insurance?
1) Its a level term insurance to a specified age (usually to age 95, 98 or 100) plus cash value.
2) It is very expensive when compared to term insurance
3) Cash value grows at a very low rate of return. In the first 10 years, you see a negative return on your money. But long term average is anywhere between 1-4%, depending on the company.
4) If you want to take money out, you have to borrow it and pay loan interest of 5-8%.
5) If you die someday, the insurance company pay the face amount of the policy (minus loans and missed premiums) to the beneficiary, but they keep all the cash value.
6) If you do get to live by the end of policy date (when you around age 100), the insurance company pay you the cash value, but you lose the insurance.
There's only one reason why that agent is trying to sell you whole life insurance: MONEY!
Next thing you'll know, that agent would try to sell you universal life insurance, a product that is more horrible than whole life, but it pays out more commissions.
Go with your instinct and find a different company who would listen to your needs. Try this site
http://free-best-life-insures-comparator-usa.blogspot.com/
Here you can get quotes from different life insurance companies in your area, its the best way to find an affordable life insurance with a reliable company.
May 24th, 2009 at 5:36 am
You do NOT want to invest in whole life. First, your savings are generally going to gain very small interest amounts. Second If somthing happens and one of you passes away, your benefit will not be that large. Third, whole life is expensive and the amount of money can seriously effect a budget, especially for a growing family.
Instead of a whole life program you want to invest in term life insurance, and invest the difference. This is where you are only insured for thirty years or so and then the insurance ends. First, term insurance is cheap, it is not going to be a big piece of your monthly spending. Second of all your benefit if one of you dies is much larger, You can get ten times the coverage for less money. Third, you will not need tons of life insurance in thirty years when your children have left the house and made it on thier own.
For your savings, simply open a ROTH IRA account. When you make the term insurance payment take the extra money you would have spent on whole life and put it in the ROTH. If you do this you will see significantly more savings when you retire, and it will not be taxed as income when you take it out. This plan will leave you with more money in the long run,and more flexability in
the short run.
May 24th, 2009 at 8:19 am
As long as the policy is in force, the full $2 million should pay regardless of age at death. There are some exclusions, such as suicide typically being excluded for the first two years. You'd have to consult the actual policy to be sure of any exclusionary endorsements.
Also, if the insured reaches age 100 (or 121 for some newer policies) then the policy is considered matured and will pay the full cash value, which should be equal to or greater than the death benefit.
Those are general insurance practices, but each individual policy may differ. Hope this helps.
May 25th, 2009 at 12:29 pm
If the carrier goes bankrupt, the policy gets transferred to another insurance company licensed to do business in your state. It happens ALL THE TIME, companies going out of business and policies being transferred.
Yep, that "adjustment" happens, and if the policy is actually not whole life, but a different kind of policy, it's going to start costing every year as the investment returns won't be enough to pay the premium every year. I'd suggest that the policy is not "paid up".
May 26th, 2009 at 1:36 pm
Any carrier with an AM Best rating of A+ or higher will do. More important than the company is who you purchase it through. Use a qualified financial advisor who determines your insurance need based on a comprehensive financial needs analysis. For most people, some permanent coverage, such as whole life, is advisable; but for working age adults, most of your coverage should normally be term.
Life insurance is a complex financial instrument to be acquired for specific purposes. As such, an insurance salesman is not qualified to advise you. Never purchase life insurance from an insurance agent or over the internet.
Added: In response to james m's edit, I am trying to do nothing but differentiate legitimate financial practitioners from salespersons who generally (many agents excepted) lack the knowledge, qualifications, and objectivity to engage in financial advisory services.
In all but a very few states, james' allegation of illegal use of the term "financial planner" is incorrect. The CFP designation is a registered commercial trademark, and not a credential regulated by any governmental body or law. A financial planner is an individual who is generally qualified in all major areas of personal financial management and makes his living offering objective, comprehensive, and independent financial advice. The FPA (the originator of the CFP designation) is not a legal authority in dictating who is qualified to engage in financial practice. I'm not convinced that they would even be competent to do so. I've known and worked with several fine CFPs, but none of them make the list of the best financial advisors I have known. In fact, few who top that list have any designations at all.
.
May 26th, 2009 at 2:24 pm
My suggestion is to get quotes from several companies by shopping around before you choose to buy with any insurer. Everyone is different so something which is good for me might not be good for you. You might want to ask your friends and family for recommendations since they know you better. Otherwise, look around the Internet, there are many quotes site available. Anyway, if you need more information or free quotes, you can visit this website http://www.insurancecentreonline.com/life-insurance-quotes.html
May 26th, 2009 at 4:07 pm
Visit
http://free-best-life-insures-comparator-usa.blogspot.com/
to compare life insurance companies.
Whole life insurance is much more expensive than term life insurance. If cheap coverage is what you're looking for then term is the way to go. Agents will tell you that the disadvantage is no cash value, but the cash value builds up so slowly that you'd be better off pocketing the difference in premium or even better investing it (you want tax deferred I would advise a Roth IRA). There is also refund of premium term where if you make all your premium payments for the life of the term, 15-30 years, then you'll get back every penny you've paid.
Whole life is more meant for older people who want to tax shelter funds for their estate. If you're young term is the way to go, it's dirt cheap.
Term life + Roth IRA = long time financial security.
May 26th, 2009 at 8:15 pm
Whoever said life insurance is good way to invest or save your money is totally wrong and possibly illegal. Life insurance only purpose is to protect you family from devastation of loss of income. If you are the main provider in providing source of income to the family and you die, life insurance will cover your income. Now most people are under-insured and so this death benefit may not last that long. That why term insurance is better so that you can buy the right amount of coverage versus what coverage can you buy base on income.
The money in your whole life policy is not safe at all. Its not FDIC insured, it gets a low rate of return, and you lose it all if you die someday. If you ever wanted to use it, you have to borrow it. When you borrow money, you lower the face amount of your policy. So it is better to save your money in a Roth IRA than in life insurance. If you die someday, your beneficiary will get your investments.
Investing is a complicated matter because there is no guarantee that your money will earn a return. You can't predict how the stock market will perform in the future. But base on past history of the stock market in United States, the long term trend is that the stock market continues to grow.
How should you invest? Have you heard about mutual funds? A mutual fund is an investment company that pools together investors money and invest it into various companies (could be as little as 25 companies or as high as 300 companies). Because mutual funds invest in so many different companies, mutual funds are said to be diversified. Mutual funds are affordable and you can invest as little as $25/month or you can put in a lump sum of $500 and just let it sit there.
There are many mutual funds out there and only a few of them can match your investment objective. Before investing, you should figure out your investment objective, meaning are you willing to accept higher risks to get higher returns? Once you figure out your investment objective, it is now time to pick the mutual funds that meets your objective.
Which mutual fund should you pick? Look at some of the popular mutual funds such as Fidelity, Legg Mason, Van Kampen, and so on. They offer all kinds of mutual funds with variety of different risks and objectives. Then obtain a prospectus of that mutual fund before investing into it. You should read this prospectus very carefully. Check its past performance, its expense ratio, its turnover ratio. top holdings in the mutual fund, and so on. Your financial advisor should be able to help you out in this.
Good luck in investing. The best tip you can take from me is invest systematically. That means you invest the same amount of money every single month. What this do is that it lowers the cost per share.