Michael Riedmiller

President

Fiduciary Financial Advisor

Best-Selling Author


Invest Smarter.

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Telephone: 877-225-0877 | 402-904-7575


Online: RiedmillerWealth.com

Educational Course: SmartMoneyPlanning.com


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Best-Selling Author of "The Road to Success"

National Academy of Best-Selling Authors


November/December 2017

Article Image Let's talk insurance Q&A

Q. I have named my only living relatives, some nieces and nephews, as beneficiaries of my life insurance policy. How can I be sure that my life insurance policy proceeds do not go unclaimed?


A. A letter of instruction, which lets your family know where you keep your policy and other personal records, is a must. In its most general terms, a letter of instruction provides specific information concerning the composition, location and intended disposition of your assets. It should list the names and contact information for all beneficiaries of life insurance policies and bank, brokerage and retirement accounts. Like other estate documents, a letter of instruction should be updated at least annually and kept in a safe place where your executor (or personal representative) and relatives can easily access it. It may be helpful to let your intended beneficiaries know that you plan on leaving each of them a share of your life insurance proceeds.


Q. The standard advice I’ve heard from many people is that I should get enough life insurance to equal eight to 12 times my annual income. Does this advice make sense?


A. It’s just a rule of thumb. It’s probably smarter to obtain a more precise estimate of what sum would be sufficient to cover your specific situation. Think about how much would be needed to pay your family’s day-to-day expenses, handle outstanding debts, set money aside for unexpected emergencies and cover the future costs of educating your children if you were no longer around. You should factor in other issues, such as whether you are the sole earner in the family, the number of children you have and how much debt you are carrying. Your insurance professional will be able to help you run the numbers.


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