NLIC.org

Julie Said:

Should banks inform customers about accidental death insurance when the account owner dies?

We Answered:

Privacy laws specifically prohibit them from telling anyone besides the executor/administrator of the estate, that information. If your husband was not yet named executor or administrator, they couldn't have told him, legally.

If you want to contact someone anyway, you'd contact your state banking commissioner.

Brad Said:

Life insurance/living will question...?

We Answered:

OK, that accidental death policy, you KNOW it only covers if he dies in an accident, right? Natural causes, like a heart attack, cancer, or stroke, are NOT covered. You know that, right?

And dismemberment is NOT the same thing as disability. In other words, if he hurts his back and is disabled and can't work any more, but doesn't become paralized or have a leg chopped off, that policy doesn't pay. I guess I'm trying to tell you, it's not likely you'll EVER collect on that AD&D policy - they're a ripoff.

You do not make a living will together. The living will, each person does, so in case they, for example, have to go on life support, it tells the doctors when to pull the plug. It's individual. Not joint.

You CAN make a "will", if you die, and in most states, you can make a JOINT will, but what's the point? In some states, a JOINT will is irrevocable - meaning, you can't EVER change it. Meaning, if he dies first, and you remarry, and then you die, your first husband's parents still get everything - not your kids from your second marriage. NOT a good idea.


You need a regular will, to distribute your stuff if either or both of you die. AND, you need a living will, for medical directives if you are incapacitated.

And you probably need REAL life insurance, in case he dies by natural causes - which is MUCH more likely than an "accidental death".

You need to see a local lawyer to have the wills and living wills written up. And you probably need to shoot whoever sold you that AD&D policy (not really) and look into buying REAL life insurance, and real disability coverage.

Carol Said:

What type of life insurance do you have and why you have it?

We Answered:

That's horrible that you were misled about the cash value and what life insurance main purpose is suppose to be. Well, you already know that cash value doesn't pay out to the beneficiary when the insured dies. Life insurance main purpose is to protect your income in case you die, not as a way to build savings.

Therefore I own term insurance. To be more specific, I own 30 year term with $500,000 coverage. It used to be $150,000, then my financial obligations increased. It only cost me $60/month. If this was a whole life policy, I wouldn't be able to afford $500,000 coverage. It will cost me about $330/month. Right now, there are people dependant on my income, so I need lots of income protection. In case I die over the next 30 years, my family will be able to maintain the same life style for a long time. Not only that, the company I have life insurance with will show my family how to invest the death benefit that can generate monthly income for the family. It is as if I'm still bringing income to the family when I'm dead.

At the same time I own term, I also contribute $100/month into my Roth IRA. If my portfolio continues to earn an average rate of return of 10% (currently its earning 11.1% in the past 5 years), in 30 years I can have approximately: $227,932. In 40 years, it can grow to: $637,678.

Now I sell term insurance and investments to all my clients.

Roberta Said:

Does Death & Dismembership Insurance work if....?

We Answered:

You forgot the first word in that policy type, ACCIDENTAL death & dismemberment.

He didn't lose his leg by accident. It was on purpose, for medical reasons. An accidental dismemberment, is when the elevator slams shut on your arm and chops it off.

His death wasn't accidental, either - it was most likely caused by infection (not accident) or complication (stroke? shock?) from the surgery.

Accidental death, is when something OUTSIDE your body kills you - like a car crash, or a piano falls out a window. Natural death, is when you get an infection inside you after surgery, or the doctor leaves a sponge in, and that kills you.

Neither his dismemberment nor his death, were "accidents" as defined by policy language.

It's not going to be covered.

That's the reason why THIS type of life insurance is so darned cheap - because MOST people don't die via accident. And it's ALSO a reason why it's a ripoff coverage.

Sorry for your loss.