August 29, 2019
Prevent Life Insurance Surprises
Angela Mahany was completely in the dark about how complicated her late husband’s finances had become.
Dick Mahany, in a loving effort years ago to make sure she would be set financially when he died, had borrowed money from a whole life insurance policy that had built up a cash balance to buy a term life insurance policy payable at his death. But when he used up the whole life policy’s value, he had to come up with enough cash to pay the premiums for both policies.
Angela discovered her husband had been doing this just a few months before he passed away in February 2017. By then, he was suffering the effects of Agent Orange exposure during the Vietnam War and could not help her figure out how to pay the premiums.
“When I was all of a sudden responsible for the finances, it blew my mind,” Angela Mahany, 73, said.
Her finances were far more complicated than the circumstances most people can expect to face when they become widowed. But being uninformed about the life insurance is not unusual.
“A husband wants to be in control, and he’ll take care of things,” said Paul Brustowicz, a former insurance agent and a grief counselor at his church. “The problems occur when he does not tell his wife about everything or what’s been done. Of course, this can also happen to a widower, if his wife handles the finances.”
Brustowicz recalled one woman who walked into the insurance company where he used to work and informed the receptionist that she could no longer afford the premiums on her deceased husband’s life insurance. The clerk looked up her policy number and confirmed her suspicion about the widow: rather than owe any money, she had $25,000 in death benefits coming to her. “The wife had no idea,” Brustowicz said. …Learn More