The purpose of life insurance is to provide for your loved ones after you die – but for that to happen, your loved ones need to be aware you have life insurance.
This seems obvious, but in fact, many people don’t discuss their policies with their beneficiaries, perhaps because they’re uncomfortable with discussing death with their spouse and/or children.
But even if you believe you have time later to talk about it, tackle the subject as soon as possible, and ensure your loved ones know the “who, what, when, and where” of your policy.
The 4 Ws
That includes the name and address of the insurance company that holds it, as well as the policy number, what it covers, the amount and date it was issued, and whom to contact in the event of your death, plus where to find your insurance records.
Without this information, your loved ones may not even realize this source of financial security exists, and won’t obtain the money you intended them to have. Your goal in buying life insurance – ensuring you protect those you will leave behind – would have failed.
Life insurance companies do try to contact your beneficiaries, but if they’ve moved to another state, and/or changed their names, phone numbers, or email addresses, the company may not be able to locate them and will likely abandon the search.
The Insurance Information Institute (III) recommends you keep copies of your life insurance records in two separate places, so should you lose one copy, another one will still be available.
One copy of your life insurance policy information should be stored at home with your other important papers; the other, in a safe deposit box or lawyer’s office.