Walk past any American firehouse and you're likely to see the same scene: easygoing people and silent trucks. Yet, when a fire erupts, those same people and trucks launch into action, achieving the pinnacle of speed, focus and determination.
Group life insurance plans work this way, too. On the surface they look the same. Most provide various options for employer funding levels, opportunities for employees to buy additional coverage, and easy payroll deduction. Because of their similarities, employers and brokers alike rarely look beyond the surface to find out what happens when the alarm bell rings: that is, how does the policy perform when an employee actually dies?
Beneficiaries need choices
Traditionally, death benefit payments have simply been a matter of sending a check to the beneficiary. However, depending on the circumstances, the bereaved might want other things to happen.
For example, he or she might want a check sent directly to the funeral home to cover immediate expenses. The carrier should be in a position to carry out that request, sending the remainder to the beneficiary. Or the beneficiary might want access to the death benefit very quickly, not wanting to wait until the carrier's payment clears the local bank's books. To meet this request, some carriers will send the beneficiary a checkbook from which to write checks directly from the death benefit proceeds, which are held in an interest-bearing account. This way no time is lost.
Some carriers offer additional services that add value before or after the moment of truth when an employee death occurs. For example, certain carriers provide employees with assistance in preparing simple wills, something many people put off due to the expense of hiring a lawyer. Even the most basic will, executed now, can prevent major issues from arising when a family goes to settle an estate.
Ask also if the carrier has any special services that help beneficiaries handle their funeral arrangements more effectively. Family members must make difficult decisions during a very emotional time, and are reticent to question prices of various funeral services. See if the carrier provides access to resources that can provide discreet and impartial advice in this area. It could save the bereaved family a substantial amount of money without detracting from the dignity or quality of the funeral.