Several years ago, I had a client who apparently longed to win a Darwin Award: while riding his motorcycle, he decided that it would be fun and/or prudent to play “chicken” with a Ford Explorer.
CareFlight scraped up the bits, and flew them to the local trauma center, which proceeded to perform over $20,000 of medicine on said bits. Needless to say, this was of little efficacy.
The client had $15,000 of term life through the group health plan. The employer, and premium payor, was his folks’ small business. And they took responsibility for making – and paying for – the funeral arrangements (which, given the circumstances outlined above, was no small thing). Naturally, I helped them file the Death Claim, and we awaited the check.
Which came to me payable not to the deceased’s parents, but his ex-wife. As you can imagine, this took both his parents and me by complete surprise.
Now, as an aside, I should have known this would happen, being the agent. This took place about 15 or so years ago, and I really don’t recall why I was blindsided. I’ll plead ignorance, and move on.
In any case, this story did not have anything like a happy ending, except that I learned the hard way that folks need to KNOW who their beneficiaries are. How many people still have former spouses listed as the beneficiary on their group insurance? How many newlyweds have policies taken out by their parents when they were but wee folk, and whose parents – not their new spouse – are still the beneficiary?
The point here is that, if you haven’t checked your policies lately, it’s never too soon to make sure that you’ve obligated the company to make sure that the right person gets the cash.