Pre-Planning Guide


Checklist

This guide is to assist you with your pre-planning journey.

The following Pre-Planning Checklist  is only a guide  and not intended to be legal advice. All situations are unique and as individualized as you are so please use this checklist as a guide or starting place, not necessarily a complete, list of needs for your situation .

  • Write down or dictate whether or not you want any funeral or memorial service.
  • Detail the specifics of the service, i.e. the music, who will deliver the eulogy, and if there will be a celebration of life gathering afterward, (including where, when, and how it is to be paid for).
  • List the details of any pre-paid funeral arrangements, and the location of any pre-paid funeral plot. The location of these documents should be known by your rep.
  • Include any details for a memorial plaque.
  • If you prefer to be cremated, make sure you indicate your final disposition and who will have authority of the final disposition of the cremains.
  • Do you have any religious considerations?
  • Will you have a wake or celebration of life? Any preferences on where it will be held?
  • Include important details for your obituary (or write one yourself; no one knows better than you who you are and what you have done). Specify where the obituary should be published. Consider any out-of-town papers, high school or University Alumni Associations.
  • Designate donation options for friends and family to send a gift in lieu of flowers.
  • List the names and addresses of all family members.
  • List the location of your wills.
  • Include the contact information for any trusts, and list your trustees.
  • Include a current list of all of your financial accounts, insurance policies, and ongoing contracts.  Make sure this includes account numbers, contact information, and company/institution names.
  • If you have someone that will take things over then they will need password information and the like to manage all of the things you have acquired in your lifetime.

End of Life Planning Considerations

  • Are your wills or trusts current?
  • Are your durable powers of attorney current?
  • Are your healthcare powers of attorney current?
  • Have you done any funeral planning:
  • Pre-need arrangements
  •  Burial or cremation contracts
  • Make a list (including statements with account numbers, contact information, and the locations of titles) of all assets, including: Information on alimony payments or any other pre-arranged payment structure, judgments, etc.
  • Bank accounts
  • Investment and retirement accounts
  • Real estate
  • Annuities, stock certificates, etc.
  • Loans owed to you/notes payable, with contact information and payment schedule.
  • A list of all income sources: social security, pensions, annuities, IRAs, etc.
  • A list of important or valuable personal property and where it can be found.
  • Information on safety deposit boxes: where they are, who has access, and where the keys are located. – A list of all life insurance policies including type of insurance, policy number(s) and contact information. NOTE: Remember to destroy policies, stock certificates and papers that are no longer valid.
  • A list of all debts, including account numbers and contact information for any:A list of all employers worked for, unions joined, or military service (including dates served).
  • Mortgages, home equity accounts
  • Auto, boat loans
  • Education loans
  • Credit cards, etc.
  • A list of all advisors, with their contact information, including: Personal telephone book (or a Christmas card list).
  • Accountants
  • Attorneys
  • Brokers, financial advisors
  • Insurance agents
  • Location of tax returns.
  • Information on all health care coverage, including policy numbers and contact information.

Are You a Procrastinator?

Remember life is a terminal situation, we just don’t know when. Living Reef Memorial has created Resolutions for Procrastinators.

  • Sign any documents designating who takes care of your affairs when you are incapacitated.
  • Sign an advanced directive for health care decisions.
  • Sign your will or living trust.
  • If you already have the documents mentioned above, review them periodically, especially after important life events like marriage, divorce, having children, retirement, etc.
  • Prearrange your funeral and burial.
  • Make sure the persons you designate are willing to act.
  •  Discuss important matters with your family.
  • Create a list of instructions to your family.
  • Review investments and consult a financial planner. Do a net worth statement. If over $1,000,000 take steps to minimize or eliminate death taxes.
  • Find and review all deeds, stock certificates, investment accounts and retirement accounts to reflect how you want ownership and beneficiaries. – Fill out a document locator record.
  • Fill out a document locator record.
  • Review all insurance policies and needs.

 

The following is a guide to introduce you to the many different forms of financing available to pre planners.

 What is funeral insurance?

 Funeral insurance is a bit of a misnomer. You can’t buy an insurance policy that will cover every conceivable cost related to your death. The terms “funeral insurance” and “burial insurance” generally refer to small life insurance policies marketed to people who want to leave a little money behind for their families to cover final expenses.

 Most big insurance companies do not offer a life insurance policy that simply provides a few thousand dollars to pay for your funeral. The largest insurers typically offer permanent life insurance policies starting at $25,000.

 But some smaller life insurance companies offer smaller guaranteed-acceptance life insurance policies and market them to seniors specifically for funeral expenses. “Guaranteed acceptance” means you don’t have to answer questions about your health or undergo a medical exam.

 These whole-life policies provide coverage for the rest of your life and have cash value. The cash account builds over time; you can withdraw or borrow against it, although the amount – plus interest – will be subtracted from the death benefit if you don’t repay it. Because these policies are small, the cash value is minimal.

The promise of no medical exam may sound appealing, but you’ll get a far better rate per $1,000 of coverage if you are in good health and apply for a traditional life insurance policy that requires health information and a medical exam.

 Insurers that don’t require health information and an exam price policies higher to cover their risk against adverse selection – unhealthy people choosing the insurance because there is no medical exam.

 “When a policy offers guaranteed acceptance, there’s always a caveat,” If you’re insurable, there are other alternatives.”

 Read the fine print on any life insurance policy you are considering purchasing. Many guaranteed-acceptance policies pay only a portion of the death benefit if you die within the first two years after purchasing them. Finally, Roberts says, check the financial rating of the life insurance company before you purchase. Pre need insurance

 Pre need insurance is another type of policy you can buy to cover some of your funeral expenses. You buy the whole life insurance policies directly from the funeral home. With a pre need policy, you choose the services you want for your funeral and buy a policy to cover the cost. Many funeral homes have licensed life insurance agents on staff who sell pre need policies. In some states, you name the funeral home director as the beneficiary, so the proceeds go directly to the provider to carry out the funeral according to your plans.

 Other states don’t allow you to name the funeral home as the beneficiary, so you have to name someone you trust to carry out your wishes.

 Many funeral homes guarantee the prices of the items you choose, such as fees for overhead, transferring, embalming, hearse and other basics.  With a guaranteed preneed policy, you don’t have to worry about prices escalating and exceeding the death benefit.

 However, prices might not be guaranteed with other preneed policies. So make sure you review the contract and understand exactly how much you’ll pay, what is guaranteed and what will happen if you can’t pay the premiums.

 It’s for the person who wants to have his funeral paid for and all choices made and written down, so the family doesn’t have to worry about anything.

 With a preneed policy, the carrier pays the death benefit immediately which is a major benefit. By contrast, you might wait 30 to 60 days to get the money from a traditional life insurance policy.

 The average amount of coverage for a preneed policy is $5,000 for clients who opt for cremation and $8,000 for those who opt for burial.

 Your age and the face value of the policy determine the premium for preneed plans. Some firms offer a guaranteed issue plan, which requires no health information, and a first-day coverage plan, which requires answers to two simple health questions.

 With the guaranteed issue plan, full coverage kicks in two years after purchase for three- five- and 10-year payments and in 10 months on a one-year payment plan. If you pay for the policy with one single premium, full coverage starts immediately. Full coverage starts immediately on multi-year payment plans for the first-day coverage plan, which is available for all but those suffering from a critical illness.

 

Other alternatives

 While it’s important to know how your funeral expenses will be paid, don’t forget to look at other expenses your loved ones will incur after you’re gone.

 When considering final expenses, take a step back and look at the bigger picture.  If you were to pass away, will all the financial needs of your dependents be taken care of?

 Consider other needs besides the funeral, such as paying medical bills, paying off a mortgage and protecting an estate for heirs.

 It’s difficult to peg what final expenses are. Talking to a trusted financial adviser to get a handle on what those expenses might be and the amount and type of life insurance to buy. Rather than purchasing a small, guaranteed issue life insurance policy or a pre need policy for your funeral, you might want to buy a larger, traditional life insurance policy, which could take care of funeral expenses as well as other financial needs your family might have.

Keep in mind a Term life insurance policy will cover you only for the policy’s term, such as 10, 15 or 20 years. Only permanent insurance, such as whole life or universal life, provides coverage no matter when you die.

 Guaranteed issue plans for funeral expenses are marketed to seniors, but other types of permanent life insurance are viable options for older adults.