They lost $100,000!
Andrea and Michael were starting over with a new baby. They knew they needed life insurance, but decided to get it on their own. Big mistake - they should have met with a licensed life insurance advisor.
Andrea at age 30 was diagnosed with an aggressive type of cancer. She died a few months later, when her son was 4 years old.
Michael went to cash in his $100,000 life insurance but the claim was declined!
He was out $100,000 that he thought he was entitled to receive to help with his new expenses.
Problem #1 Michael and Andrea thought they had bought real life insurance, but they had only bought accidental insurance. Cancer, like the majority of causes of death at every age was not an accident. Cancer was natural causes and therefore wasn't covered by accidental coverage.
Problem # 2 They had set up a meeting with a life insurance broker 3 years earlier but didn't show up. They missed two appointments with a licensed professional who would have explained the problem with their department store insurance certificate.
Lesson learned: The accidental life policy was cheaper. My client said it best to his daughter "We can't afford to buy cheap.
MYTH: More young people die from accidents than by natural causes. FALSE NOTION This is probably based on the fact that we hear news from far away places when one or more teenager dies in a car crash - but we don't hear about the dozens who died that same weekend from diseases.
Gordon is an experienced financial planner Wand wrote a weekly financial advice column in Daily newspaper for 6 years