Understanding Life Insurance Claims
Dear Liz: Last year, my mother passed away, and I found out she had two life insurance policies from companies that no longer exist. How can I find out which modern insurance company might be responsible for these old policies? Also, how do I go about submitting a claim? My mother was born in 1932. The first policy was issued in 1939 for $350, and the second one started in 1943 for $600.
Answer: It’s not guaranteed that a current insurer will have these policies, but it's worth checking. Begin by searching the names of the old companies online to see if any new owners are mentioned. If that doesn’t yield results, reach out to the insurance department in the state where the old company was based; they maintain records of mergers and other changes.
If the company has gone bankrupt, you will need to contact the guaranty association in the state where your mother lived. These associations protect policyholders when an insurer defaults or becomes insolvent. The National Organization of Life and Health Insurance Guaranty Associations can help you find the right association to reach out to.
Another option is to utilize the life insurance policy locator service provided by the National Association of Insurance Commissioners. You will need to enter your mother’s Social Security number along with her birth and death dates to search for any claims associated with her.
Additionally, check the unclaimed property offices in any states where she resided, as they may have relevant information about her policies.
Choosing a Financial Advisor Wisely
Dear Liz: Do you have any general tips for selecting a tax preparer? My financial advisor has suggested that I switch my 403(b) contributions to a Roth 403(b) with the same investment plan. I'm concerned that this might push us into a higher tax bracket right now.
Answer: Ideally, a financial advisor should not recommend switching to a Roth option without a solid understanding of your current and future tax situations. If they don’t have this knowledge, they may not be qualified to assess whether giving up your current tax break will be beneficial in the long run.
Unfortunately, not all financial advisors are adequately qualified to provide sound advice. Some, especially those focusing on 403(b) investments, may prioritize sales over fiduciary guidance. Therefore, it’s essential to seek reliable sources when selecting your financial advisors.
You can obtain referrals to tax professionals from various organizations that advocate for fiduciary standards, ensuring that they prioritize your interests above their own.
Impact of Spousal Death on Credit Limits
Dear Liz: You’ve emphasized the importance of each spouse having credit cards where they are the primary account holder. My husband passed away last year, and we had a credit card that showed the charges made on our individually numbered cards. I discovered that the account was solely in his name. I had to apply for a new credit card in my name, and my credit limit dropped dramatically from $75,000 to $7,000. I hope this serves as a warning to others.
Answer: It’s important to remember that most credit cards today are not joint accounts. Typically, one person is the primary account holder while the other is an authorized user. When the primary account holder dies, credit card companies often work with surviving spouses who were authorized users to set up new accounts, although the credit limits may vary significantly from the original.
Encouraging individuals to ensure that both spouses have their own credit accounts can help prevent complications during such difficult times. Proper planning can mitigate future discomfort caused by sudden financial limitations in unexpected situations.
Seeking Broader Financial Guidance
For additional financial advice, consider seeking referrals from organizations that represent fee-only fiduciary planners. Many financial advisors are dedicated to acting in your best interest and can assist with estate planning, retirement savings, and tax strategies. Additionally, educators should explore resources designed to help teachers effectively manage their retirement plans.
Taking the time to research and select qualified advisors can lead to long-term benefits for your financial future. It’s crucial to understand the terms of your accounts, especially after significant life changes, to maintain financial stability.
Frequently Asked Questions
How can I locate a life insurance policy from an old company?
Start by searching online for the names of the old companies. You can also contact the state insurance department where the company was based for additional help.
What can I do if the insurance company is no longer in business?
If the company is defunct, consult the guaranty association in your mother's state, which protects policyholders when an insurer fails.
What should I look for in a financial advisor?
Choose an advisor that is a fiduciary, meaning they are legally obligated to act in your best interests, ideally after an analysis of your current and future financial needs.
How does a spouse's death affect credit card accounts?
Many credit cards are individually held accounts, meaning a surviving spouse may need to apply for their own credit with potentially lower limits after the primary account holder passes away.
What resources are available for teachers regarding retirement plans?
Teachers can utilize organizations focused on financial planning and resources such as 403bwise, which rates retirement plans and educates about potential pitfalls.
