{Article Source: https://www.today.com/money/how-set-will-life-insurance-during-coronavirus-pandemic-t177146}
"Whether you are 18, 88 or 188, it doesn't really matter. You should be able to tell people what your wishes are in the case you can't tell people yourself."
"When people usually ask me when the right time is to set up your estate, I usually say it was yesterday," said Chas Rampenthal, general counsel for Legal Zoom.
April 9, 2020, 4:27 PM EDT
By Callie Patteson
When it comes to writing a will or setting up your life insurance policy, it is easy to say, "I'll do that tomorrow." But what if tomorrow ushers in an emergency like the coronavirus pandemic? A living will and a life insurance policy is something every adult should have in place in preparation for the worst-case scenario.
But according to a 2020 study done by Caring.com, a site with information about caring for seniors, only 32% of adults say they have a will — a 25% decrease from the number of people in 2017.
Caring.com CEO Jim Rosenthal finds these numbers troubling. "It's not the most challenging thing out there," he told TODAY. "Anything we can do to nudge people in an empathetic way to start this process is helpful."
To help with your estate planning during this pandemic, TODAY spoke to experts to better understand the ins and outs of wills and the different types of life insurance.
When it comes to estate planning, there are two key terms to define: a will and life insurance.
A will is a legal document that allows a person to express his or her wishes to family members or loved ones in cases when that individual is unable to express them, like after death.
For the will to become a legal document, it must be signed in front of and initialed by two disinterested witnesses — people who will not benefit from the contents of the will. A notary is not required for a will to be valid, but many include a self-proving affidavit in their wills that proves the witnesses signed the will in the presence of a notary. This is not required for a will but prevents witnesses from testifying in court if there is a question of the validity of the will.
There are three types of life insurance: group, whole and term.
Group insurance is affordable and very convenient since it is usually included in an employee benefits package. Since this type of insurance is dependent on your job, it most likely will not follow you during a career change. It is often double your salary, or around $250,000, so you'll want to determine if that's enough money for your family to survive on should you pass away. If you want coverage exceeding that amount, it shouldn't be the sole option for you and your family.
Whole life insurance is much more costly as it covers the individual for a lifetime (as long as he or she keeps paying the insurance premiums) and offers cash value that can grow over time. It can be complex and usually requires the help of a financial adviser when purchasing. Coverage for whole life insurance varies; the world record for the most expensive policy is $201 million. The average premium for $500,000 worth of coverage through insurance company State Farm is $561.59/month.
Term life insurance is the most affordable option for new families or young adults. With smaller premiums than whole life insurance, term life insurance covers a predetermined amount of time, such as 20 years, instead of a lifetime. Unlike whole life insurance, term life insurance only pays a death benefit during the time period specified and is really for protection only (a family, for example, could buy a policy that covers the period that sees their children through college and their final mortgage payment). According to life insurance agency Haven Life, which is backed by MassMutual and provides term life insurance that can be purchased online, a healthy 35-year-old woman could get $500,000 worth of coverage for about $20 a month for 20 years.
"People are often shocked by that," said Yaron Ben-Zvi, the CEO of Haven Life. "It's less than you're spending on your coffee budget for the month."
"Term insurance — in particular for young people who are just starting out and having a family — is incredibly inexpensive," said Bob Owens, CEO of Owens Group Insurance in New Jersey. "Because the likelihood of a 28-year-old dying, even in the coronavirus time, is pretty low. Buy $1 million for a few hundred dollars a year — why wouldn't you have that for your family from the jump?"
"The right time is as soon as you have financial dependents," said Ben-Zvi. "For a lot of people, that does mean when they first have kids, but there could be other financial dependents as well — if your parents depend on you, if a niece or nephew or if somebody else feels their life is depending on your income."
However, for some, waiting for financial dependents is not soon enough.
"When people usually ask me when the right time is to set up your estate, I usually say it was yesterday," said Chas Rampenthal, general counsel for Legal Zoom, a legal technology company that allows customers to create documents such as a will without necessarily having to hire a lawyer.
According to Rampenthal, short-term natural disasters tend to remind people of this really important thing that they have been putting off.
"Making a will and making an estate plan is something you should be doing no matter what," he said. "Whether you are 18, 88 or 188, it doesn't really matter. You should be able to tell people what your wishes are in the case you can't tell people yourself."
Before starting to settle your estate, it is important to begin talking to loved ones about the plan you would like to leave in place. From there, gather any documents you need to set up your will or life insurance to speed up the process.
Some states will allow adults to sign legal documents without witnesses immediately present through a self-proving affidavit, however, it still requires the presence of a notary. Even with social distancing, Rampenthal says you don't have to avoid a notary or disinterested witnesses.
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