4 Reasons You Should Check—and Double-Check—Your Beneficiaries

August 6, 2018

The whole reason you got life insurance was to protect your loved ones. But if you’re not careful, your life insurance money may not end up in the hands of the individual you intended.

Naming your beneficiaries sounds like a simple enough process, and in general it is. The problems arise when you don’t provide enough information about your beneficiaries or your life circumstances change (and trust us, circumstances always change).

Here are four reasons you should check—and double-check—your beneficiaries today.

1. Your beneficiary has a common name. According to Ancestry.com, there are 38,313 James Smiths and 32,092 Maria Garcias in the United States. If it’s not immediately clear which James Smith or Maria Garcia you selected as your beneficiary, things can get complicated very quickly. Even if it seems clear to you, it’s better to err on the side of caution. Include Social Security numbers and addresses for your beneficiaries so there is no question about who will receive the proceeds of your life insurance policy. 
2. You get divorced and/or remarry. After a painful divorce, you’ve met and married the love of your life. Congratulations! Unfortunately, your life insurance company wasn’t invited to the wedding. After major life changes like a marriage or divorce, you’ll want to update your beneficiaries. Otherwise, your ex may get a sudden windfall while your beloved spouse ends up with nothing.
3. You have another child. You thought you were done having children. Surprise! In between diaper changes and much-needed naps, be sure to add your new baby to your policy as soon as possible. Note that minors may not receive a life insurance payout. Until your child is an adult, you’ll need to name a custodian, guardian or trust as the beneficiary. Even if your child legally is an adult, you may want to consider establishing a trust to manage the proceeds until your child hits 25 or 30.
4. Your primary beneficiary dies before you do. There are two types of beneficiaries: primary and contingent. The primary beneficiary is the individual who will receive the proceeds of your policy, while the contingent beneficiary is in place in case your primary beneficiary dies. If your primary beneficiary does indeed die before you, it’s a good idea to update your beneficiaries and make sure you still have both a primary and a contingent beneficiary.

There are a few other things to keep in mind when it comes to naming your beneficiaries. First, remember that your life insurance policy is a contract, and as such, the life insurance company is obligated to give the proceeds of your policy to whomever you named as your beneficiary no matter what another document says. In other words, your life insurance policy supersedes your will. Make things easier on everyone and be sure your wishes are reflected correctly in both documents.

Second, you can name multiple primary beneficiaries. To keep things simple, it’s a good idea to assign percentages to each beneficiary rather than a set dollar amount.

Finally, as with all estate planning, communication is key. According to Consumer Reports, 1 out of every 600 people is the beneficiary of an unclaimed forgotten or misplaced life insurance policy. Make sure your loved ones know you have a life insurance policy. Tell them you have uploaded it to InsureYouKnow.org, and let them know how to access it. The last thing you want is for all your careful planning and preparation to go to waste.

Last Will vs. Living Will: What’s the Difference?

July 19, 2018

After you sign up at InsureYouKnow.org, the first thing you’ll want to do is compile a list of all the important documents you want to upload and store on the site. Most likely, at the top of your list will be your will. But take note: You should have two wills, a living will and a last will.

So what’s the difference?

A last will and testament is the document most people think of when they think of a will. It provides instructions on how to distribute your assets when you die. This is where you explain who gets your house, your cash, or any other valuables. There are a few different types of last wills, including simple wills (for uncomplicated estates), testamentary trust wills (for estates that involve a trust), and joint wills (for two individuals who want to leave their estates to each other), but they serve the same purpose: to ensure your estate is distributed as you desire.

A living will is very different from a last will. This document has nothing to do with the distribution of property. Rather, a living will is a type of advance directive that spells out the medical care you would like to receive in the event you become incapacitated and cannot communicate your wishes on your own. In other words, a living will provides a way for your loved ones to know your preferences regarding the following:

• The use of CPR if your heart stops beating
• The use of mechanical ventilation if you can no longer breathe on your own
• The use of feeding tubes if you can no longer eat or drink on your own
• The use of antibiotics and other medications
• Organ and tissue donation

According to a recent study published in the journal Health Affairs, less than one-third of U.S. adults have completed a living will. Of the 795,909 adults included in the study, 36.7 percent had completed some type of advance directive, including 29.3 percent who had completed a living will. While it’s not an enjoyable experience to sit down and imagine yourself in a situation where you can’t discuss your care with your doctor yourself, it’s incredibly important that you do so as an accident or other unexpected situation can occur at any time.

Of course, it does no good to write down your wishes if no one knows. You also have to tell your loved ones the document exists and explain where they can find it if the need arises.

“As I like to say, the form is only as good as the conversation and the shared understanding that goes along with it,” Dr. Rebecca Sudore of the University of California, San Francisco School of Medicine, who wasn’t involved in the study, told Reuters Health. “Some people do fill out these forms with families or lawyers, and then the forms sit in the dusty recesses of a back drawer and they are not available or shared with family and friends, especially before they are needed.”

Creating—and sharing—a living will can help your loved ones tremendously in case of a crisis. Do them and yourself a favor by completing one today and uploading it to InsureYouKnow.org. The peace of mind you will be giving your loved ones far outweighs any momentary discomfort the task may bring.

Protecting Your Privacy

July 2, 2018

In today’s world where personal information is the most valuable resource, some companies are finding it difficult to keep their promises to users to protect their data. Here at InsureYouKnow.org, keeping our users’ information safe is our No. 1 priority.

Our commitment to protecting your privacy will never waver.

Take the case of WhatsApp, the world’s most popular messaging app. When Facebook purchased WhatsApp for a cool $22 billion back in 2014, the pairing seemed destined for internet history. The number of WhatsApp users jumped from 450 million at the time of the purchase in February 2014 to more than one billion by February 2016, just two years later.

Unfortunately, as detailed in a recent story in The Wall Street Journal, the honeymoon quickly came to an end.

The two founders of WhatsApp, Jan Koum and Brian Acton, are strong proponents of user privacy and avid opponents of advertising. Facebook CEO Mark Zuckerberg and Chief Operating Officer Sheryl Sandberg, on the other hand, have “built a sprawling, lucrative advertising business that shows ads to users based on data gathered about their activities.” Facebook leverages access to user information to sell targeted advertising and does not charge its users for its services; WhatsApp initially carried no ads and charged users 99 cents each year (the company has since abandoned the user fee).

The two business models were polar opposites, in other words.

Knowing that some users would be wary of the merger, Koum and Acton took steps to alleviate any concerns. They vowed not to require WhatsApp users to integrate their Facebook account with the service. They said they would never share user data with their new parent company. Zuckerberg himself said he wouldn’t place ads on WhatsApp.

But the leaders of the two companies quickly clashed over how to produce more revenue from WhatsApp. Sandberg pushed the WhatsApp founders to reconsider their stance on advertising and pursue other revenue models. Zuckerberg wanted them to add special features to the app that they could monetize. In 2016, WhatsApp announced it was updating its privacy policy to begin sharing users’ phone numbers with Facebook. In 2017, company leaders began discussing the possibility of running ads in WhatsApp’s Status feature, which allows users to post photos and videos for their contacts to see.

Ultimately, Koum and Acton were so dissatisfied with the situation that they chose to leave the company they had founded. Acton left in September 2017, and Koum announced his resignation seven months later. Together, the men forfeited approximately $1.3 billion by leaving before their contracts were scheduled to end in November 2018.

We are Team WhatsApp. At InsureYouKnow.org, we only capture the minimal amount of information needed—such as your name and the last four digits of most accounts—and we never, ever sell or share your data. Period. We use Amazon cloud encryption to protect your account so you can rest easy knowing your sensitive documents are stored securely. Anything you upload is password-encrypted, and we do not know your password—only you or someone you share your password with can ever access the documents.

For more information about how we protect your privacy, check out our FAQ page or contact us.

End-of-Life Planning: More Than a Will

June 12, 2018

As the saying goes, nothing is certain but death and taxes. Many of us, however, spend more time making sure everything is in order for the IRS than we do for our loved ones. And when we do take the time to create a will and discuss our burial preferences with our family members, we tend to stop there.

But there are so many more details involved in our deaths than who inherits our collection of first editions and where we want to be buried.

NPR’s “Weekend Edition” recently featured a story on Amy Pickard, whose mother died unexpectedly in 2012. As she handled her mother’s estate, Pickard was overwhelmed by all the questions she couldn’t answer, from what her mom’s smartphone passcode was to how to access her bank account.

“[I had to] become a detective basically,” Pickard told NPR.

Determining what bills needed to be paid and tracking down her mom’s car title would be difficult enough on a good day, but trying to piece together the puzzle of her mom’s life while grieving made things so much harder. It took Pickard two years to fully settle her mom’s affairs.

To help prevent others from going through the same difficult experience, Pickard founded Good to Go!, which offers private parties and consultations to guide individuals through their end-of-life paperwork. Based in Los Angeles, Pickard holds a party at her home once a month where people bring food that reminds them of a deceased loved one and complete a 50-page document she calls the Good to Go! Departure File. By incorporating a relaxed, fun approach that is filled with humor, Pickard makes the process less daunting and more manageable.

The Departure File includes a template for a living will, which addresses the medical care you’d like to receive in the event you are incapacitated and can’t communicate your own wishes, from the use of CPR if your heart stops beating to your preferences regarding organ donation. It also addresses minor but important details such as whether you’d want a TV on or music playing in your hospital room. In addition, the Departure File includes a booklet covering all sorts of information your loved ones will need after you die, such as:

• Contact information for friends and business associates
• Passwords for your email and social media accounts
• Plans for your pets
• Instructions for what to do with your photos, journals, and other personal items
• Obituary preferences (whether you want one and what photo you’d like used)
• The location of letters you’ve written to loved ones to be read after you’re gone

Whether you use Pickard’s Departure File (available for purchase on her website) or create your own document, storing all your data in one place is essential. InsureYouKnow.org is the perfect spot. Be sure to upload this document along with your last will and testament, life insurance policies, health insurance information, and other important files. Your loved ones will be going through enough when you die; don’t make them go through all these unanswered questions as well.

What Constitutes a True “Emergency”?

May 28, 2018

You’re a responsible person. You’re saving for retirement. You have a 529 plan set up to help pay for your daughter’s college education. Your car is paid off. You have an adequate amount of life insurance. You’re using InsureYouKnow to make sure your loved ones know how to access your important documents and financial information if needed. And you have six months of living expenses set aside in an emergency fund.

Then the unexpected happens: The alternator goes out in your car. It’s going to cost $400 to replace it.

Where do you find the money to pay for it?

If you answered, “My emergency fund,” you may want to take another look at your definition of “emergency.”

Your emergency fund is money you have socked away in case of a major life event, such as a job loss, divorce, or medical issue. This money would be used to cover your day-to-day expenses and bills if needed.

Washington Post columnist Michelle Singletary advocates the use of a separate fund—the “life happens” fund—for those pesky but somewhat predictable expenses that crop up.

“You’ll withdraw money from this fund to pay for unexpected or major expenses that don’t quite fit the dire straits definition,” Singletary wrote. “Car repairs would come out of this account. Start with trying to save $500, ideally increasing to a few thousand.”

Whether you call it the “life happens” fund, the “just in case” fund, or some other term, this fund is for those immediate expenses that aren’t quite catastrophic. These are expenses that result from situations that people often treat as emergencies but that in reality are expected, if irregular, like a broken appliance.

In an ideal world, you’d never touch your emergency fund. You wouldn’t lose your job. You wouldn’t get diagnosed with a major medical condition. You would have a regular, steady income with no major disruptive events in your life. For many people, this is indeed the case. That money sits in an easily accessible savings account where it earns minimal interest but supplies maximum peace of mind.

But even in an ideal world, you’re probably going to tap into your life happens fund fairly regularly. Even the most budget-obsessed person can’t predict every expense that may appear, such as the following:

• A storm blows through, knocking large tree branches onto the roof of your house that have to be sawed apart and hauled away.
• Your dog swallows a tennis ball and needs emergency surgery to remove it.
• Your toddler climbs onto the dishwasher door one too many times and it finally breaks.
• Your aunt dies and you need to fly out for the funeral.

In many of these situations, life is already stressful enough without you needing to scramble to come up with money for the resulting expenses. And you don’t want to tap into your emergency fund because that’s money you never want to touch. The life happens fund is the perfect compromise. Like an emergency fund, it’s kept in a savings account where it’s accessible on a moment’s notice. But unlike an emergency fund, taking money out of it won’t potentially result in your water getting shut off when you suddenly find yourself without an income.

Keep in mind that because you do need to access this fund somewhat regularly, it’s important to replace any money you take out as soon as possible. After all, life happens—and you never know when the next storm is going to pass through town.