A few years ago, we filed a death claim on a client who had died.  That’s when we discovered that he had collaterally assigned the policy to his ex-wife to cover his debt to her following the divorce.  He had repaid all the money but had never gotten the assignment released. 

His current wife needed the money to take care of their business obligations.  But she could not collect the benefit without either proving the money had all been paid to his former wife or getting the previous wife to sign a release.  This situation could have been easily resolved if the policyholder had taken the time for a regular review of his insurance.

We recommend making a list of insurance policies including information such as amount of coverage, beneficiary, and other important data.  There is a form for listing this in The Legacy Drawer binder which is also an excellent place to organize all your personal and financial documents.