Month: November 2015

Many people purchase life insurance, but fail in the critical step of properly selecting their beneficiaries.  This article provides useful information on designating beneficiaries.

You are free to name just about anyone as your beneficiary.  For most people it’s usually a close family member.  However, you can choose any competent person or even an entity, such as a charity.

Beneficiary designations can be made by naming specific people or entities; or they can be made by class, for example, “my children.” Use full names to avoid confusion.  You can be more specific by referring to birth dates or social security numbers.  Designating classes can be more challenging.  For instance, the designation “my children” may lead to controversy over whether stepchildren are included.  Be specific with class designations.

You can name multiple beneficiaries to receive equal or unequal shares.  For multiple beneficiaries, use percentages or some other method of division not based upon actual dollar amounts.  For example, you can specify division “in equal shares.”  Dollar amounts often become outdated due to policy loans or changing cash values.

You can also choose a trust as beneficiary.  This can be useful in benefiting minors or disabled persons. Your primary beneficiary will always receive policy proceeds first.  If this is a person, he or she must be alive when you die.  If that named beneficiary is deceased, the policy proceeds go to your contingent beneficiary.

Therefore, it is important to name a contingent beneficiary.  If you and your primary beneficiary pass away at the same time, your primary beneficiary is presumed to have died first.  As a result, if there were no contingency plan, you wouldn’t have a named beneficiary.  The policy proceeds would go to your estate.  Having a named beneficiary avoids having your life insurance benefits pass through your estate.  This can save potential estate taxes as well as probate costs.

Sometimes naming a minor as a beneficiary is a bad idea.  Insurance companies normally won’t make payments to them.  Instead, consider a trust for the minor’s benefit.   Also, most states have passed some form of the Uniform Transfers to Minors Act (UTMA).  Under UTMA, through a proper designation, you can transfer your life insurance proceeds to a custodian for the benefit of minor beneficiaries.

Be sure to review your beneficiary designations on a regular basis and, if necessary, make the necessary revisions due to marriages, divorces, births, and deaths.

It is important to focus on two main goals in choosing beneficiaries:  make sure your designations fulfill your goals, and avoid needless legal controversies.  Consult your financial planner for more information.

According to the Centers for Disease Control and Prevention (CDC), 11.5 percent of the U.S. adult population—or about 26.5 million—had diagnosed heart disease in 2011, the most recent year for which numbers are available. It kills about 600,000 people in the U.S. every year—making it the leading cause of death for both men and women. While heart disease comes in several variations, coronary artery disease is the most common, killing more than 385,000 annually.

Risk factors for heart disease include high blood pressure, high HDL cholesterol, smoking, poor diet, physical inactivity and excessive weight—and they tend to be interconnected. Consider these simple ways to mitigate your risks and reduce your chances of becoming the victim of our nation’s number one killer.

• Get active. According to the American Heart Association (AHA), nearly 70 percent of Americans don’t get the daily physical activity they need to stay healthy. In the fight against heart disease, any activity is better than being sedentary. If you find it impossible to get 75 minutes of vigorous exercise or 150 minutes of moderate-intensity exercise each week, squeeze in what you can. Not only will you burn more calories, but you’ll also reduce your risk of developing high cholesterol, high blood sugar and high blood pressure problems.

• Manage stress. Some studies have linked high levels of cortisol, a hormone produced by your body in times of stress, to heart disease. While a little bit of stress can be good for you—warning you of danger, for example—chronic stress can devastate. Exercise is one way to manage it. Physically active people report experiencing less stress as well as having more energy, an improvement in mood and a healthier outlook on life.

• Adopt good nutrition. Heart-healthy foods are low in saturated fat, trans fat and cholesterol. They’re also low in sodium and added sugars. They are high in whole grain fibers, lean proteins and produce. For optimal health, keep sodium under 1,500 mg a day, include at least 4.5 cups of fruits and vegetables, avoid sugar sweetened beverages, eat fish twice a week, and choose fat free or low fat dairy products.
• Lower your blood pressure. According to the AHA, high blood pressure, or hypertension, is the most significant risk factor for heart disease. Unfortunately, 90 percent of Americans will develop hypertension in their lifetime. Keep your blood pressure below 120/80 by eating a healthy diet, reducing stress, increasing physical activity and avoiding tobacco smoke.

• Maintain a healthy body weight. According to the CDC, more than 66 percent of American adults are overweight or obese. Not only does this increase their chances of developing heart disease, but also diabetes, high blood pressure and high cholesterol. Keep tabs on your body mass index (BMI), an estimate of body fat based on height and weight. If yours is higher than 25, you’re in the overweight category. If it’s over 30, you’re obese. Take steps to lose a few pounds. Better nutrition will help, as will increasing your calories burned through exercise. Even losing 5 to 10 percent of your body weight has impressive health benefits.

• Don’t smoke. Smoking damages your circulatory system, not only increasing your risk of coronary heart disease but also aneurysms, blood clots and hardened arteries. If you’re a smoker, quit as soon as possible. If you’re not a smoker, avoid exposure to secondhand smoke. According to the American Cancer Society, scientists have linked secondhand smoke to lung cancer, throat cancer and cancers of the brain, bladder, stomach and breast.

While you should try to incorporate each of these key steps for a healthy heart into your life, you don’t have to tackle them all at once. According to the AHA, making positive changes in even one area can make a significant difference. Choose one to begin and add the rest over time for the most dramatic results.