When the bereaved have to take care of the deceased last expenses: funeral costs, debts, taxes—that is when death becomes cruel.

People purchase insurance to soften or eliminate this financial burden for those left behind.

BUT … there are many types of life insurance and knowing what you have purchased can make all of the difference to those grieving.

An individual policy, whether term, whole life, or universal life is owned by the individual purchasing the policy.

A group life insurance benefit, whether a percentage of salary or a flat benefit amount, is owned by the company (employer) offering this benefit to his/her employees. A group benefit plan has many advantages, not least of which is the ability to offer insured coverage to those individuals who would otherwise not be able to obtain an individual policy due to health or lifestyle circumstances.

BUT AGAIN, it is vital to know what you have.

  • Recently we addressed a death of an individual who’s only coverage was provided by the group insurance plan. The individual named three beneficiaries for the proceeds: her spouse and two children, one dependent, one not. All of this may seem straightforward, on the surface, but it was not.
  • The Will disputed the beneficiaries.
    No trustee form was completed for the minor.
  • All three beneficiaries had to complete the life claim form, which slowed the process, leaving room for errors in its completion.

In the end, the Will had no bearing over the life proceeds as the Will would only supersede life insurance ‘owned’ by the deceased. The group policy was ‘owned’ by the corporation. Because of a lack of trustee appointment, the spouse had to obtain a legal declaration affirming parentage, redo the life claim report and provide a copy of the minor’s birth certificate.

Now, in addition to suffering the loss of a loved one, bills, administrative and financial issues are heaped onto the bereaved.

Death will never be easy, but the cruelty of paperwork can certainly be lessened.

Don’t discount the value of the Group Life benefit and neglect the simple paperwork associated with ‘getting it right the first time’.


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