subject: Life Insurance Tips For Widows [print this page] Trying to make decisions after losing a husband can be painful, confusing and tough. Because of severe emotional strain, the sheer volume of tasks that now face you, ranging from financial decisions on investment, tax and estate planning to your own needs like health and wellness, may seem utterly daunting. It may be difficult to see clearly and think on your feet, and for some, this hapless state carries on for a very long time. At this time, you may need comfort and help in any and all forms. We hope this helps you find some answers to questions you may have.
How vulnerable are you?
Widows from baby boomer generation are in an especially tight spot when it comes to understanding life insurance. Traditional boomer families most likely relegated financial planning to the husbands who, being the primary bread winners made the most important decisions with or without consulting wives or children. Young widows who may have been married for too short a while may face the most amount of emotional upheaval, especially if the children are very young. As a young widow, you may have the financial acumen to understand estate planning and irrevocable trusts, or you may know how to find answers through faster routes. But even if you do, it doesnt make it any easier, and we understand.
Before collecting on a life insurance policy
You may have death benefit amounts from one or more life insurance policies coming to you. You would first need to find out who your husband appointed as executor of his estate. This will most likely be a trusted lawyer who can assist you through this difficult time.Your husbands life insurance agent can help you find out what options you may have to collect the death benefit. In most cases, the payout is income tax-free, especially when it comes to term life insurance. This means no federal or state income tax, but if the proceeds form a part of your husbands estate, they will be subject to federal estate tax. With permanent forms of life insurance, the death benefit amount is usually subject to the same rules as term life. Group life coverage through an employer may yet be subject to different rules. Your husbands agent (or HR department) will have the correct information about his policy. Typically, the two options offered are:
Electing to receive the entire death benefit income tax-free.
Receiving the death benefit in installments instead of a lump sum that will be taxed for any amount of interest growth over the years.
Changing your ideas about life insurance proceeds
Some families plan life insurance payouts to include things like the mortgage, family vacation home and childrens education. You may find that you are not ready to take on the responsibilities for some of these obligations you thought you would have the strength to. Take your time to make important decisions like paying off the mortgage and living the rest of your life in the same home that you and your husband may have shared for many years. Some find it emotionally challenging, others cannot manage large front and backyards and house upkeep. You and your husband may also have planned not to hand over any inheritances to children until your passing; if you change your mind, make sure not to rush any decisions. Your long term planning needs will also change depending on the times. Dont feel afraid to rethink some of these decisions because it may be disloyal to the memory of your husband. Spending the rest of your life without him is a task that you will have to face alone.
Collecting on a lost policy
There are more than one ways to find these policies, which will include some amount of searching, calling and following up from your end. If you feel fatigued with the process or do not have the emotional strength to carry on, ask a relative or someone you trust for help.
Beware of scammers
You may find that your vulnerable state of distress is attracting the wrong kind of help. Talk to a family member or friend you trust to help you wean the scammers from the saviors. Beware of promises of lucrative annuities that sound too good to be true. Never pay someone without checking on their credentials and background and demanding a receipt.
Every season brings change, and for some of us, adapting to life without the person you loved the most is harder than anything else youve ever done. Dont be ashamed of grieving, asking for help and needing the time and space to think clearly. Take firm and sound decisions by stepping away from the pain and sadness of your loss and planning for a better, brighter future that your husband would undoubtedly have wanted for you.
by: Pat Cassidy
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