Everyday Cheapskate: Understanding Life Insurance Policies
Dear Mary: I read your column all the time and can't thank you enough for all the helpful money-saving hints you print. My mom bought 20-year term life insurance policies for my two sons in the 1970s when they were young. I know she finished paying on them, and I know she didn't cash them out. When my kids were in their late 20s, Mom told me she was going to give the policies to them so they could put whatever beneficiary they wanted on them. After she passed away, I found that neither of my sons even knew these policies existed. Now what do I do? -- Judith L., email
Dear Judith: This is confusing. You say she bought 20-year term life insurance policies. The nature of term insurance is that it provides coverage for a period of time -- in this case, 20 years. As long as your mother paid the premiums, the insurance was in effect. After 20 years (sometime in the 1990s), the insured (your sons) could either drop the policy or pay annually increasing premiums to continue the coverage. It sounds like they didn't continue the coverage.
Term insurance, unlike whole life, has no cash value. How term insurance works is simple: If the insured dies during the term and the policy premiums are current, the beneficiary receives the face value on the policy as a death benefit. Once the term is up, if the policy is not renewed, it's over.
For readers considering life insurance on kids, consider that Judith's mother would have been wise to put those insurance premiums into a savings account instead. In the unlikely event that one of the boys had died in childhood, the money would have been there to cover the costs of burial. What's more likely is that the boys would have had a nest egg when they reached adulthood. Childhood deaths are statistically very unlikely.
Dear Mary: I buy good-quality cotton towels. However, they continually get a mildew smell after I use them for a couple of days. I hang them to dry, and I rotate new ones twice a week. I use white vinegar in the rinse water and wash them on the hottest water setting as well as the hottest dryer setting, sometimes with dryer sheets and sometimes not. After all that, they still smell. What do you suggest? -- J.C., New Jersey
Dear J.C.:Try changing the kind of laundry detergent you're using, and for now, I would launder them after each use. An odor indicates the presence of bacteria, so something is getting through your laundering process. You might want to try adding 1/2 cup of borax to the wash cycle and 1/4 cup of liquid chlorine bleach if the towels are white. Hanging them in the bright sunshine to dry will also go a long way to alleviate this problem.
If this stink continues, read "Stinky Laundry, Smelly Washer: How to Clean Your Washing Machine" at EverydayCheapskate.com/stinky.
Dear Mary: My husband and I want to thank you. We first got your book "Debt-Proof Living: How to Get Out of Debt & Stay That Way" a number of years ago. We have worked to get out of debt and fund our contingency fund. The only debt we have is our home. We only have one credit card, and we pay the balance in full. Our contingency fund is fully funded and even has extra money in it.
We recently heard that my husband will be laid off soon. He has begun looking for another job, and we are cutting everything we can. I work full time in a local government job. You helped us prepare for this, and we are very grateful. We just wanted to thank you so much. -- Doris and Elliot, Virginia
Dear Doris and Elliot: I am sorry to hear you will be facing unemployment soon but thrilled to know that you are well prepared. I truly believe that God uses financial challenges to bring clarity to our minds on what really matters in this life and what doesn't. Thanks for your kind words, and please stay in touch so we can encourage each other in the coming days.
Would you like more information? Go to EverydayCheapskate.com for links and resources for recommended products and services in this column. Mary invites questions, comments and tips at EverydayCheapskate.com, "Ask Mary." This column will answer questions of general interest, but letters cannot be answered individually. Mary Hunt is the founder of EverydayCheapskate.com, a lifestyle blog, and the author of the book "Debt-Proof Living."Copyright 2020 Creators Syndicate Inc.