Pull Out Your Old Policy Today and Check These 6 Things

In almost every home I visit there is a folder on the top shelf of a closet, sometimes inside a shoebox next to the birth certificates and the passports. Inside it sits a policy somebody bought eight, twelve or fifteen years ago and nobody has opened since. Today I want to ask you for something simple: go get that folder and sit with it for twenty minutes. Not to buy anything, just to know what you actually have.

I ask because the policy stays still while your life does not. Prices change, the people living with you change, your health changes, even your mailing address changes. A policy that was perfect in 2012 may today name someone you no longer speak to, or cover half of what a funeral costs. And nobody warns you: the insurance company will not call to tell you your coverage fell behind.

The 6 things you are looking for on the paper

• Who is listed as beneficiary, full name, and whether that is still the right person.
• How much the coverage is, in dollars, exactly as printed.
• Whether it is a term policy and the exact date it ends.
• Whether the premiums are still being paid, and from which account or card.
• Whether there is a waiting period or graded benefit during the first two years.
• Where the document is kept and who in your family knows it exists.

The beneficiary and the amount: this is where most policies fail

Start with the beneficiary, because that is what I find outdated most often. Plenty of people named their mother back in 2009 and their mother has since passed. Others named a husband or wife they separated from years ago and never touched the paperwork again. Here is something that surprises many families: the money goes straight to the person named on the policy, not to whoever ended up paying the funeral home and not to whoever the family assumes should get it. A will does not override that designation. Check for a contingent beneficiary too, the second in line in case the first one is gone. If that line is blank, it is worth filling in.

Then look at the amount, not the one you remember but the one printed on the page. Five thousand dollars sounded very reasonable fifteen years ago. Today in Texas the average funeral runs close to $9,200 according to the NFDA, and in the real quotes I have reviewed with families the range goes from $4,000 to $18,000, depending on the funeral home, the type of service and whether the body is being sent to Mexico or another country. That transport is the piece almost nobody has budgeted, and it is what raises the total fastest.

The expiration date and the payment

Third thing: look for the word term on your policy, then look for the date. A lot of twenty year terms were bought around 2006 or 2008, so they have already ended or are about to. When a term runs out you can usually renew it, but at the price of your age today, and that jump tends to hit hard. It is far better to find out now, with time to decide calmly, than to find out on the day when there is nothing left to do.

Fourth: confirm it is still being paid. It sounds obvious and it is one of the most common problems I see. The card on file expired, or the family switched banks, or they moved and the notices kept going to the old address. The policy lapsed and nobody found out until the worst possible day. If you have any doubt, call the carrier, ask for the status in writing and keep that letter with the folder. In many cases, when the lapse is recent, the policy can still be reinstated.

The insurance company will not call to tell you your coverage fell behind.

The fine print and where the paper lives

Fifth: see whether your policy has a waiting period or a graded benefit during the first two years. It is normal on final expense plans issued with no medical exam and there is nothing wrong with it, but you need to know. It means that if death occurs within that window from natural causes, the company usually returns the premiums paid plus a percentage instead of the full benefit. If your policy has been active for years, that stage is behind you and you are in full coverage. And the sixth one, the one I care about most: does anyone know where that paper is? I have seen families with a fully paid policy take weeks to claim it because nobody could find the number. Take a photo of the first page, keep it on your phone, send it to your daughter or your brother, and write down the company name and the policy number somewhere simple. It costs nothing and it saves a lot of anguish.

If you finish the review and everything checks out, I am genuinely glad: close the folder and get on with your day. If something did not add up, there is a way forward. A final expense plan starts around $30 a month, asks for no medical exam, is issued between ages 30 and 85, accepts common conditions like diabetes or high blood pressure, and approval usually comes back in about 48 hours. If what worries you is the mortgage or the income that holds the household together, that is where we talk about life insurance starting at $50,000. And since the papers are already out, take a look at your health coverage too: if you qualify based on income and household size, the Marketplace subsidy can bring your ACA plan down to very little per month, sometimes to $0. I walk through it plainly in the guide at /hablemos-de-obamacare.

All coverage is subject to approval and varies by age, health and state of residence. Any amounts or timeframes mentioned are general references, not an offer or a guarantee of approval. Savings on ACA plans depend on whether you qualify based on your income and household size. Mario Barrera, licensed insurance agent. TX Lic. #3008095, NPN 17440153. Licensed in Texas, California, Florida, New York, Illinois, Arizona, Virginia and Maryland.

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