Life Insurance Planning For Wives
You may be a part of
the majority of women who do not want to discuss the death of their husband and
what arrangements should be made to make things easier for you and to insure
that you will have enough money to live on when it does happen. I can assure you
that in 8 cases out of 10 that your husband will die before you. I can also tell you
that the Census Bureau indicates that 50% of all women over 65 are NOW widows
and will outlive their husbands by 18 years. It also indicated that the average age
when a widow became a widow was 58 years old. Finally, that women will outlive
men by 5-7 years and that the average woman is 2-3 years younger than the man at
the time of marriage. So be practical and be realistic and concede that you will
outlive your husband. Please do not consider this a taboo subject!!!
Living Will: You both should have one and you MUST know where it is and it
must be available at all times in case of emergency. Copies should be kept in the
glove compartment of the car, with the medical records at the hospital, with your
doctor and if necessary, a copy in your purse. You can avoid a lot of unnecessary
bills and hardship by having a living will. Burial: Now is the time to decide
whether your spouse wants a standard burial, donation of the body to medical
science and/or cremation. Put this in writing and consider the costs in your
decision! Widows have borrowed money to bury their spouse and gone into debt.
Widows pay, $5,000-$7,000 for the funeral when they had little or no money and
they could have had a $2,000 funeral by doing away with some frills. Now is the
time to call a funeral home for a quote on the type of funeral you want and see if
you can afford the cost. Donation of the body is the cheapest. It will not cost one
penny. In any case, do not get a quote from just one funeral home-get a couple for
comparison. Finally, does your spouse want a military funeral? If yes, he should
find out if it can be done. Normally, the funeral home makes the arrangements.
Life Insurance Policies: You should have a separate file/folder for each policy
and it should include the policy and all other documents pertaining to that policy.
The folder should show the policy number, a CURRENT phone number, value of
the policy now and in future years. It should indicate the cash value, if any, and
the type of policy, i.e., term, whole life, Universal life, etc. Also, the premiums
now and in the future. About every three years you should call your agent or the
insurance company to make sure the phone numbers to call in case of death are
still good and to review the policy as to value, costs, and future changes. You
should do this right now on all your policies!
How much money will I have to live on when my husband dies? This is the
number one question that all widows have. When the spouse dies the income
normally drops drastically and the widow has a big financial problem. So now is
the time to figure out if you will have this same problem. The first step is to put
down on paper the amount of your present income and where it comes from:
Retired pay, civilian pay and/or retirement, yours and his Social Security,
investments, etc. Then indicate what your income will be at his death. For
example you will get the highest of the Social Security but will lose one or the
other. If you are not yet 60, you will get no Social Security until 60. You will lose
his retired pay but may get some Survivor Benefit Plan (SBP) if he had taken SBP.
But be careful, the amount indicated on most pay statement as the SBP annuity is
not correct if you are over 62. The amount shown is only if you are under 62. This
is a very complicated area, but in most cases the annuity is 55% of whatever the
base amount of SBP selected and at the widow age 62, it changes to 35%. Again,
this is complicated and in some cases for senior officers Lt Colonels and above)
the widow may get more than the 35%. Just don't be fooled into thinking you will
always get the annuity shown on the pay statement. The easiest way to figure out
the amount from your investments is to add up all the money invested, times it by
6% interest and divide by 12 to give you about what you can get each month from
investments. This will be a good ball park figure to work with regarding your total
income. The bottom line here is that if you do not have enough income to live on
when your husband dies, what can you do about it? Now is the time to plan and
not after the death of your spouse.
Important Papers: Besides the folders on life insurance you should have in your
file a copy of your health insurance policy; auto and home policies; records of
your home to include homestead documents; major expenditures; federal and state
tax files; copies of at least your last 5 military pay statements; civil service
documentation; civilian work documents and anything else that would affect
present and/or future finances. Also, certificates of birth, marriage, divorce, death,
etc. Keep good records of all your important documents.