I bought a typewriter last year, a used (but guaranteed) IBM Selectric: I knew my future included completing pounds of forms.
As most know, I handled the affairs of a disabled friend. Now I serve as his Personal Representative, the Missouri term for Executor. That means filling-out a bunch of forms, including several to claim life insurance.
The insurers don’t make life easy. Every company has its own forms and criteria, of course. A couple of the forms covered ten or more pages – but had nice big spaces to place the required information. Others have lines so short that the smaller pitch on the IBM is still higher than the space! And, all the companies require more information on me – one even asked at what hospital or address I was born – than they do about the insured.
Not a surprise, all of the companies offer a variety of things to do with the insurance money. It could be paid-out in five years. It could be transferred to a new policy for a new person. It could be used to start an annuity. It could fund a check book, well, actually a book of insurance drafts, which could “be used like checks to pay bills and make purchases.” Way, way down the list was actually getting a check for the policy amount. (One company charges a $100 processing fee to get a paper check.)
Now, to get the forms meant surviving the call center gauntlet. My call was always important but it took several people (and, often several calls) to get to someone authorized to send out the forms. Then, it always takes much longer than promised to get the vital papers.
Why? Simple. The longer the insurance company dawdles the more money they make. And, if they can defer payment for weeks or decades they make more.
Time for some insurance trivia…
In 2020 just 54% of Americans had life insurance, with many only covered by a group plan from their employer. Insurance sales people say one ought to have life insurance equal to ten to 15 times annual earnings. But’s that’s not the case. While Missourians have over $55 billion in active policies, that averages out to less than $10,000 per person. A significant portion of the policies are little, such as the Gerber Life Insurance plans marketed for generations to new parents or the Colonial Penn ‘we take anybody’ policies Alex Trebeck hawked. Life Insurance Statistics in 2021 | Policygenius • Face value of U.S. life insurance policy purchases 2018 | Statista
Speaking of Colonial Penn, I completed their questionnaire and got a quote today: for just $9.95 a month ($119.40 a year) I can get one unit of coverage, worth $987. To get the $10,000 needed for a modest but tasteful midwest burial I’d need 11 units, or, $1,433 a year. Better odds than Powerball, but…
Ironically, some policies are never paid as heirs never find evidence of a policy. That was almost true in my friend’s case. Fortunately (?) he never destroyed a check he wrote. Flipping through them I found some from the 1970’s memo-ed as “Life Ins.” I sent inquiry letters – and got referred to call centers.
One of the companies took some research. They changed names twice and got bought out. It’s not a big payout but the company almost got to keep it!
Glenn
IBM Selectric photo by Oliver Kurmis, CC BY 2.5 <https://creativecommons.org/licenses/by/2.5>, via Wikimedia Commons