Recently I read an article written by an insurance agent regarding the loss of long term care insurance by those who need it most. It raised an interesting point: when dementia or senility begins, one of the most common signs of the disease is confusion about when and how to pay bills. Certain bills get paid twice, some not at all, and the bigger the amount, the less likely it will get paid.
And usually, because they are large bills, the life insurance, long-term care insurance and often auto insurance premium notices end up in the wastepaper basket. If they are not used to paying online through a bill-pay or automatic system, the policies lapse and no one knows about it.
These are the folks who most need this type of coverage but it is sometimes too late to reinstate the coverage once a family member discovers the lapses.
If you or a loved one is beginning to experience this kind of cognitive decline please make sure as many bills as possible are set up for automatic deductions from a checking account along with a line of credit to cover insufficient funds. And ask for duplicates of your checking statements to go to a loved one or a bank trust department which offers this kind of service. Or if you can, give your user names and passwords to an online bill pay program to a trusted family member for the same reasons.
If you have a trusted financial advisor, make sure your advisor is aware of the insurance policies you own. You could request annual statements from the insurance companies be sent to your advisor once a year. That serves as a check for you to have someone else know if a policy lapses or is in danger of default.
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