How to Ensure Your Life Insurance Benefits Go to Your Heirs

July 18, 2013

Recently, 11 major life insurance companies agreed to pay $763 million to the heirs of deceased policyholders after it was discovered the companies continued billing customers for their policies even after they were dead.

This agreement is the second in the last two years to be reached with insurance companies, which had previously agreed to provide restitution and do a much better job of locating beneficiaries after being sued by the attorneys general of several states for not paying out benefits to the heirs of deceased policyholders.

This pattern seems to indicate that we all need to do a better job to ensure that the life insurance benefits we pay out come back to our heirs in the way we intend. Here are 5 tips for making sure your heirs benefit from your life insurance benefits:

Be truthful in your application. If you have not been completely forthcoming about a major medical issue or your health habits (smoking, drinking, etc.) in your application for a life insurance policy, that policy could be declared null and void and your heirs would be out of luck.

Don’t let it lapse. If your family is counting on life insurance benefits to pay the bills if something should happen to you, and you have not been paying the bills for the policy, your family is left unprotected.


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