Recently in Life Insurance Category

As you doubtless know from the media coverage, the Titanic sank 100 years ago last week. That disaster was long considered to be the most costly maritime insurance loss although the sinking of the Concordia Costa last year in Italy seems to have surpassed it. It's interesting, therefore, that a Titanic insurance document has just surfaced for the first time in a century. The document, which records the total pay out of £4,000 (an estimated £263,000 or $419,432 in today's money) by Royal Insurance, now part of the RSA Insurance Group has never before been seen by anyone outside RSA. This was only a small portion of the total insurance payments. As the ship's hull and machinery was valued at £1 million, owners White Star Line would have had hundreds of different insurers.

The Encyclopedia Titanica has over 100 articles about insurance claims on the Titanic. Initial estimates two weeks after the disaster were that life insurance payouts totaled around $2.1 million, and accident insurance payouts came to a little more than $1.5 million. The industry estimated that life insurance losses would end up at $4 million, accident insurance losses at $2 million. Many passengers carried specific life insurance and travel policies while the survivors of other lost passengers filed claims against White Star Lines. One Mrs. Irene Harris claimed $1,000, 000 for the loss of her husband, a theatrical manager. The first claim settled was for a Mr. Ervin G. Lewy of Chicago and in a morbid note, the article comments that without a death certificate, the company had to "strain certain points" to allow the payment. Eventually, White Star paid $664,000 to settle all the claims.

In a fascinating look back at the insurance industry of a century ago, this New York Times article from April 1912 is highly complimentary to the insurers who settled the Titanic claims so quickly. It also notes that while in the age of sail, a ship was never declared lost until a year and a day after it was expected in port, modern technology - i.e., radios - had changed that age old rule and now ships were considered lost almost immediately upon the disaster.

While the golden age of ocean liners is undoubtedly past, cruise ships are at sea in record numbers. While the chances of anything happening on a modern cruise are so slight as to be almost nil, you, like John Jacob Astor, may want to consider buying travel insurance if you're planning a voyage on the ocean deep. And you should periodically evaluate your life insurance coverage - a good idea whether you'll be taking any ocean cruises or not. Your independent Renaissance Alliance insurance agent can help!

*Image source: PD-US - The Titanic

The Insurance Information Institute (III) is showing the love this Valentine's Day, insurance style. They've created a themed Pinterest board to celebrate the day. For those of you not up on your social media trends, Pinterest is the popular "virtual pinboard" that lets you clip and share things you find on the web.

III has gathered some fun images and reminders about showing your love, insurance style... such as making sure that any expensive gifts are insured and practicing safe shopping when making online purchases for your sweethearts.

They also posted a series of three quirky video clips - life insurance promoted by fruit flies. Yes, fruit flies - you will have to watch them to see for yourself. This is part of an informational campaign called Insure Your Love, which is sponsored by the Life Foundation, ostensibly to create some buzz (ahem) around life insurance. If you are wondering what life insurance has to do with fruit flies, you can learn more at Fruit Fly Q&A, which features more clips with Frank and Fran, the stars of the fruit fly campaign.

This is an amusing ad for Dutch insurer Delta Lloyd - you don't need to understand what's being said, the story line is pretty self explanatory. Just a guess, but it would appear the product is life insurance!

Watch more humorous insurance advertising in our insurance humor category!

There's a total of more than $32 billion in the nation's unclaimed property pools representing more than 117 million accounts. It's mostly money or assets that were either forgotten or abandoned - and in many cases, the abandonment occurred when the account holder died and nobody else knew the account(s) existed. Don't let your property become part of that pot!

We've previously talked about the importance of updating your beneficiaries on insurance polices and other financial records. Just like changing batteries in your smoke detector and getting your car inspected, you should set a routine time to do this annually - failing to do so might leave your loved ones wrangling with court proceedings - or even totally unprotected. The importance of planning cannot be overemphasized. Not to be grim, but you simply never know when your time will be up. For a statistical assessment, see our prior post What are the Odds where we have a lot of risk tools that you can play with. They range from actuarial tables to to calculators for finding out your relative risk of dying in the next year or being attacked by a shark.

OK, you get the point. Planning is important. This past week, the Wall St. Journal featured an excellent and very helpful article in their finance section about The 25 Documents You Need Before You Die - alternately titled as "Designing your death dossier," which makes it sound pretty fancy. The article makes the point that it is not simply enough to ensure that your policies are updated - it's also critical that somebody in your family knows what and where all your important documents are.

We counted more than 25 important documents referenced in the article - but it is unlikely that all will be relevant to your situation. Nevertheless, it's a great reference article to bookmark and keep as a checklist for your annual planning.

Oh, and about that unclaimed $32 billion, if you think any of it might rightfully belong to you, here's a good place to check: The National Association of Unclaimed Property Administrators will let you conduct a free search.

Tomorrow is the American Cancer Society's 35th Annual Great American Smokeout, a good day to quit smoking if you haven't already, or to support the smokers that you know in kicking their habit. Quitting smoking is not only a good decision with respect to your physical health, it can also be quite a boon to your financial health. Even beyond the cost of cigarettes themselves, smoking carries other high costs. Most life insurance, health insurance, homeowners insurance and even auto insurance policies carry higher premiums for smokers. It stands to reason: the price of insurance is based on the odds of having to make payment on a claim. Smokers are an overall riskier bet than nonsmokers. For life and heath insurance, the risks are obvious and well-documented: on average, smokers have significantly more health problems and die younger.

Property insurance is also more costly for smokers due to a higher risk of smoking-related accidents. Households with smokers have an increased risk of fires. According to the US Fire Administration, "... an estimated 9,000 smoking-related fires in residential buildings occur annually in the United States, resulting in an estimated average of 450 deaths, 1,025 injuries, and $303 million in property loss ...they are the leading cause of fire deaths, accounting for 17 percent of fire deaths in residential buildings." Smoking is also considered to be one of the major "distracted driving" culprits leading to an increase in auto accidents. And with any property, residual damage from smoke can decrease the property value and make resale more difficult. There may be other costs too: last year, it was revealed that Apple voided computer warranties due to second-hand smoke.

Save your health and save money in the process - that's a win-win all around!

Stop smoking resources
American Cancer Society: Great American Smokeout Guide to Quitting Smoking
American Cancer Society: Great American Smokeout Resources and Tools
American Cancer Society: Helping a smoker quite: do's and don'ts
American Lung Association - Help resources for quitting smoking
Centers for Disease Control: Smoking & tobacco tools and resources
Mayo Clinic 10 ways to help teens stay smoke-free
Teen's Health: How can I quit smoking?

Given that it's Life Insurance Awareness Month, we thought we might offer a few tools for you to assess your risk of imminent mortality. We've mixed the serious with the silly to lighten things up a bit.

Death Risk Rankings is an interactive tool from CarnegieMellon that calculates your risk of dying in the next year and allows you to compare that risk to others in the world.

Heart Disease Risk Calculator - estimate your chance of a cardiac event, dying from heart disease, and your overall chance of dying in the next 10 years.

Dead at your age - enter your birthday and find out what celebrities and famous people you have outlived.

Are you likely to die of a shark attack? Compare the relative risk of shark attacks to humans to various other risks.

Life Expectancy Table - find your age and your sex to learn the additional number of years you may expect to live. A footnote says that one-half of individuals can expect to live beyond their life expectancy and one-half will not live to that age.

The Death Clock bills itself as "the Internet's friendly reminder that life is slipping away... second by second." Enter your date of birth, sex, bmi and smoking status. You can choose to your results on a scale ranging from "sadistic" to "optimistic" - or just plain "normal."

Do you have family members who depend on your income? The National Association of Insurance Commissioners (NAIC) tells us that September is "Life Insurance Awareness Month" and reminds us that lifestyle choices and factors can have an impact on the availability and cost of insurance coverage. "The cost of an individual health or life insurance policy takes into account your age, height, weight, medical history, occupation, driving record, your family health history and other personal habits like smoking." Insurance companies also take high risk activities such as mountain climbing, horseback riding, motorcycle riding, flying, or hang-gliding into consideration.

NAIC provides an overview of the information an insurance company will typically request on a life or health insurance application, along with an overview of the underwriting process and some tips on what you should do if you are denied coverage. Also see NAIC's Life Insurance Buyer's Guide (PDF).

Additional information:
Buying Life Insurance and Annuities in Massachusetts - from the MA Office of Consumer Affairs
Life Insurance - info from the CT Insurance Department
Annuities and Life Insurance - from the NH Insurance Department
The Facts of Life and Annuities (PDF) - from LIMRA International, Inc. (Life Insurance and Market Research Association)

Would you like to be buried in your favorite car? Or perhaps you'd prefer to be preserved as a mummy sitting upright and kept on display at your alma mater? And how would you like your assets to be dispersed? Would you like to leave your life's fortune to a precious pooch or to have it divvied up and doled out to strangers? Or perhaps after you've passed, you'd like to have a single red rose delivered daily to your surviving spouse, the way Jack Benny did? All these odd will requests and many others have been stipulated in wills at one time or another.

Whether your post-mortem wishes are highly exotic or purely pedestrian, they aren't likely to happen at all unless you take proactive steps to ensure that they do - and that requires filing a will and keeping it updated. Making a will is an important part of the financial planning process.

"Dying intestate" is the common term for dying without a will. When that happens, decisions about the disposition of your assets default to the applicable state law, which may or may not be in accordance with your preferences. Dying intestate might also result in a dispute among potential your heirs or a delay in assets being dispersed to your heirs. The CCH Financial Planning Toolkit adds some important considerations:

"The bad thing about dying intestate (other than dying, of course) is that a state's default rules may not go far enough to meet a deceased's distribution wishes. For example, although a surviving spouse is generally first in line to inherit, the spouse may end up having to share the estate with other relatives of the deceased. Also, if a person is not on the list of potential heirs, then he or she is out of luck (which may result in excluding a "life partner," lifelong friend, or favorite charity). The final indignity is that, if there are no relatives identified during probate, the state takes the assets the deceased spent a lifetime acquiring."

You can learn what is likely to happen to your assets should you die without a will by checking this map of intestate succession laws for all 50 states.

It's important to note that a will is not the be all and end all for ensuring the dispersal of your assets according to your wishes. The distribution of many of your financial assets - such as life insurance policies or 401K and IRA accounts - would be governed by who you named as a beneficiary. It's extremely important for you to keep your beneficiaries up to date because life circumstances change. You may or may not be pleased if your ex-spouse inherits your life insurance policy, but if you haven't changed the designated beneficiary, that could happen.

Have you just had a new baby or are you expecting one soon? If so, you are part of a demographic trend. More babies are born in August than in any other month, according to the National Center for Health Statistics. September is the second-highest month, and while Tuesday has traditionally been the highest day of the week for births, Wednesday has been edging it out in recent years. See more interesting facts on birth and motherhood at the US Census Mother's Day press release. The government keeps track of a lot of interesting data related to births. You can find out the most popular baby names by year on the Social Security website - or view the cute video version of top baby names. You can even find the most popular names by region.

Now check your insurance!
The National Association of Insurance Commissioners (NAIC) suggests steps that new parents should take to protect their growing family by checking insurance coverage. Anytime you experience a major life event - such as a marriage, a birth, a death, a new home - it's important to remember to review your insurance policies. With a new baby, health insurance and life insurance are both coverages that should be reviewed to ensure that you are adequately protected. NAIC suggests there may also be auto and homeowners insurance considerations.

The Social Security office also reminds parents to register your child for a Social Security number, which you need to claim your child as a dependent on your income tax return, and may be necessary for medical coverage, setting up financial accounts, or eligibility for government-sponsored services.

As you gather your year-end documents for tax preparation, there is one important financial item that should be included: checking your insurance policies and other important financial records and plans to ensure that your designated beneficiaries are up to date. It's a good idea to review beneficiaries annually because life events may have changed your situation. Parents die, marriages dissolve, children are born, and any of these events may warrant a change in beneficiaries. Failing to periodically update your beneficiaries could have unintended consequences - you might not want a former spouse rather than your current spouse to be the beneficiary of your assets but that could happen!

Here are some best practices when naming beneficiaries:
Always name a beneficiary. People who have wills often think they have their beneficiaries covered, but this assumption can be wrong. Generally, beneficiaries named in insurance policies and retirement plans will take precedence over any instructions you leave in your will. Make sure you have specified individuals as beneficiaries in your policies and plans. People often name their "estate" as the beneficiary but this can lead to benefits being tied up in probate court. Failure to name a beneficiary may also mean that you miss out on certain plan or policy advantages. For example, if you name an estate as beneficiary, an IRA will be liquidated on your death and taxes will be due. If your spouse is named as beneficiary, he or she could potentially continue to enjoy tax-free growth.

Be specific. Avoid ambiguous language. Simply stating "my husband" or "my niece" may not be sufficient, particularly in instances of multiple marriages. It's a good idea to use full names of intended beneficiaries to avoid potential confusion or disputes.

Name a secondary beneficiary. Make sure that it will be you and not your state law that determines who will be the recipient of your policy benefits. If your primary beneficiary should pass away and you have not named a secondary or contingent beneficiary, your insurance policy or retirement plan will be distributed according to your will. If you have no will, the decision will default to state law.

Keep important records in a secure place and tell a trusted family member what and where they are. Many people die suddenly without leaving instructions as to where a will, insurance papers and other important records are kept. All too often, benefits go unclaimed because family members don't know about potential benefits or can't find important account information. Bank accounts and insurance policies are overlooked. Make sure someone in your family is familiar with your most important records and where they are kept.

Further reading:
Are your beneficiaries up to date?
Update your beneficiaries
Life Insurance: Reviewing Your Policy Important to Securing Your Family's Future
Insurance Beneficiaries