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Family Finances: An Annual review of Your Life Insurance Policy Can PRevent Future Family Feuds

Life insurance can be an invaluable investment for you and your family – as long as you know how to use it to your advantage and follow the proper steps to keep your policy updated. An annual review of your life insurance policy can allow you to save money now and prevent your loved ones from dealing with any unnecessary headaches later in their lives. Many people simply do not take the time to review their policy on a regular basis, which can result in big problems down the road if critical information is not updated accordingly.

Even the rich and famous have endured life insurance mishaps. Former award-winning actor Dennis Hopper was in the process of divorcing his ex-wife Victoria Duffy when he passed away from prostate cancer in 2010. Duffy was listed as the sole beneficiary of his million-dollar policy, but Hopper reportedly wanted her removed altogether due to the pending divorce. A judge ended up limiting Duffy to onequarter of the policy during a hearing prior to his death, with the remaining $750,000 going to his estate.

That scenario is just one example of what can go wrong if beneficiary designations are not updated regularly. Make it an annual tradition at the start of each year to ask yourself these three important questions…

1) Are there major life changes that may impact your current policy? Consider any major life changes in the past 12 months while also looking ahead to the upcoming year. For instance, have you been remarried or recently divorced? Did you lose a loved one, have another child, or is your son or daughter expecting your first grandchild? These are all considerations that should be addressed and updated in your life insurance policy if needed. As in the case of Dennis Hopper and his ex-wife, this scenario could have been avoided had he made arrangements to change his beneficiary when he first filed for divorce. Also, as another lesson learned from this example, if you’re omitting people as beneficiaries from your life insurance policy, you may want to also consider documenting in your will or trust that this omission was intentional.

2) Have the needs for your policy changed? You may have purchased life insurance when your children were younger, but now they are out of the house and you’re no longer financially responsible for them. Your insurance needs may be less as a result. Your spouse may be the only person whose livelihood you want to protect in the event you were no longer here.

3) Did you buy this policy more than 10 years ago? If you did, you may want to revisit how much you paid, what exactly your current policy covers and find out if there is an alternative that better suits your needs today. Life insurance has changed quite a bit over the last decade, and you could get a better policy that is less expensive now, so you may want to shop around for the best options.

If you answered “yes” to any of these questions, then now is the time to speak to a financial professional who can provide you with the answers and the solutions you need. Make it your annual tradition to review and update the life insurance policy you have to ensure it is the best fit for you and your family.

ABOUT FORTUNE FINANCIAL GROUP

Christopher Scalese, financial advisor and president of Fortune Financial Group, is best known as Northeastern Pennsylvania’s Retirement Specialist. Scalese has spent the last two decades of his career assisting area residents with the financial transition from the working years to the retirement years. His primary goal is to help individuals structure their finances so that they have a steady income throughout their lifetime, while working to ensure their finances aren’t overly exposed to risk or unnecessary taxation. Scalese is an investment advisor representative, life and health insurance licensed and currently working on earning his Chartered Financial Consultant designation. Scalese received his Bachelor of Science degree in finance and Master of Business Administration degree from Wilkes University. For more information about Christopher Scalese and Fortune Financial Group, please visit www.fortune-financial.org.

Investment advisory services offered through Global Financial Private Capital, LLC,
an SEC Registered Investment Advisor.

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