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.

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