Online Applications And Other Planning Concerns

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Every school student used to recite Alfred, Lord Tennyson’s poem, The Charge of the Light Brigade. From his high vantage point in the Battle of Balaclava in 1854, Lord Raglan commanded the British cavalry to cut off Russian efforts to carry away captured Turkish cannon. At his lower position, the Earl of Cardigan could not see the Russian movement when he received the orders and assumed Raglan meant to attack the main enemy battery. Armed only with sword and sabre, he obediently led his 600 horsemen “Into the Valley of Death.”

Even when instructions seem clear, things can go wrong. Online capability has eliminated many common life insurance application shortfalls, but inaccurate or the lack of important further information can still create significant problems after an otherwise proper policy issue.

Consider some items that require extra attention:
  • Are all parties properly identified? – Especially when business entities and trusts are the policy owners or beneficiaries. Carriers often differ in their requirements.
  • Are changes in parties properly made with the carrier? – As circumstances change, necessary policy alterations must be recorded without creating adverse tax results.
  • Is the requested status of multiple owners accurate? – Do they hold the policy jointly or with differing interests as tenants in common?
  • If a non-insured owner dies first, who’s in charge? – Designating a contingent owner is often overlooked.
  • Is there complete and proper allocation of the death benefit? – Dollar amounts can change with policy increases or the presence of collateral assignments. Designation should be in percentages that always add up to 100%.
  • What if beneficiaries die first? – Contingent beneficiaries should be named and their interests made clear (e.g. are descendants to receive per stirpes or per capita).

We will help you with all the “what ifs” that attend the unique planning circumstances in your specific case. Contact Tom Virkler, JD, Director of Advanced Markets, at tom@cpsadvancedmarkets.com or (706) 614-3796.