Taking the Mystery out of Estate Planning and Life Insurance

By John Horn and Dera Johnsen-Tracy

Modest estates are particularly susceptible to a change of circumstances that often occur in most people’s lives, whether financial, health or legal. Failure to plan well can be catastrophic. In the October AAII Journal article, Planning Essentials for Modest Estates, Horn and Johnsen-Tracy explore the basics of planning for modest estates and the basic planning documents that you need to have in place. After all, regardless of your age or financial circumstances, everyone needs an estate plan.

Some of the basic estate planning issues that the article covers include:

• The essential estate planning documents you need
• The limits of health care power of attorney
• What property power of attorney entails
• When HIPAA authorization is activated
• The difference between irrevocable and revocable living trusts

The documents covered in the article can help protect your estate from the probate courts, assure your wishes are carried out and even allow you to claim Medicaid benefits without exhausting most of your assets first. Regardless of your preparedness now, this article acts as a refresher on the importance of creating and signing essential estate planning documents. 

By Brian Fechtel

Cash-value life insurance (e.g., whole life, universal life, etc.) can be a terrific product, providing both financial security and attractive investment returns. However, when it comes to the life insurance industry’s products, finding reliable information, analysis and expertise can be more than just a little bit difficult. Given that few, if any, policyholders ever obtain or use real relevant financial information and expert financial analysis of policies, it ought not surprise anyone that cash-value life insurance as an investment is so seriously misunderstood and widely disparaged.

The article, Assessing Your Life Insurer’s Financial Performance, guides you through conducting an analysis of your life insurer, including the importance of:

• What questions you need to be asking your insurer
• Why financial statements should be analyzed before you purchase a plan
• How to analyze an insurer’s financial statements

Typically, those who are buying or renewing life insurance analyze their plans using policy illustrations, financial ratings agency rankings and summaries. Unfortunately, not only do those approaches create serious problems, but the problems are seldom recognized or understood. We hope that this article can walk you through steps you can take to better understand your policy and insurer.