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STORY: ROBIN FELTMAN, 18TH STREET FINANCIAL SERVICES, LLP

Covid. The word itself makes me groan these days. For over two years it has sickened and murdered people we love and created fractious divisions among us at a time when unity would certainly have served us better. To this day it disrupts our way of life, one socially distant wedding, concert, or funeral at a time. And there is no clear end in sight.

Still, if every cloud has a silver lining, the good news must be the lessons this virus has taught us. Some people learned to shop online. Most everyone learned to virtually visit with loved ones. Too many learned how to write an obituary. Others learned that vaccination is more about hope gifted than freedom stolen—a simple act of kindness that can make the difference between life and death for countless others. Everyone seems to have learned something.

As a financial and insurance professional, I learned that people often don’t understand the fate of their assets when they die. Most everyone is familiar with the concept of beneficiaries, but the finer points are frequently misunderstood. In general terms, primary beneficiaries are paid FIRST. Contingent beneficiaries are paid SECOND, but only if the primary is not living. This can cause confusion and plenty of hurt feelings. For example, some clients want to name the oldest child as primary beneficiary, and the younger two as contingents—until they realize that they would be completely cutting off the younger children (unless the oldest child dies). And that, folks, is how books like “Mommy Dearest” get written.

When married clients die within days of each other, unintended consequences can arise. Consider Bob and Mary (spouses), and their daughter Debbie. Bob and Mary are primary beneficiaries of each other, and Debbie is contingent of both of them. Let’s assume Bob and Mary are both hospitalized with Covid. If Bob dies today, and Mary dies a week later, you might guess that Bob’s individually owned asset would go to Debbie. But that’s not always the case, especially with insurance products. The specifics are outlined in the policy itself, and the terms can vary from policy to policy and state to state.

In some cases, Bob and Mary would have been deemed to die simultaneously, and all would go according to plan. In others, the death benefit might have to be paid to Bob’s estate. The reason is that Mary owns the asset once Bob has passed, but she hasn’t had time to name beneficiaries before she dies. Yes, Debbie may be a contingent beneficiary on assets Mary already owned, but not on this one. What actually happens in such a case depends on several factors: the state where the policy was issued, the laws at the time the policy was purchased, and the terms of the policy itself.

Some issues are hard to anticipate, but others can be avoided with a clear understanding of how beneficiary designations work. This is a crazy time, but there are things you can do to improve outcomes. Get vaccinated. Buy life insurance if you can (and read your policy). Get an insurance and financial review, and make sure your beneficiaries are correctly named and that your affairs are in good order. More than anything, Covid has taught us that life is unpredictable. We should do what we can to ease our survivors’ burdens if the unexpected should happen to us. ASMARTINSURANCE SOLUTIONFORYOUR WHOLELIFE

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