Most people assume they’ve got wills and insurance figured out. After all, how complicated can it be to pass things on or leave money behind? Turns out, a lot is going on beneath the surface. Between legal fine print and some surprisingly common misconceptions, things aren’t always what they seem. Let’s unpack 10 lesser-known facts that shed light on what really goes on behind the paperwork.
Life Insurance Isn’t A Sure Thing
It’s easy to assume that life insurance always pays out. But reality doesn’t always follow expectations. Insurers look closely at every claim. If there was any misrepresentation or a policy lapse, they can deny it. And if they open an investigation, expect delays that stretch into months or even years.
A Will Doesn’t Cover Everything
It’s not uncommon to see someone update their will and still lose control of key assets. That’s because things like retirement funds and joint accounts skip the will entirely. They’re governed by beneficiary designations or ownership type. The assumption that the will holds all the power often leads to the biggest mistakes.
Insurance Policy Always Wins
At first glance, writing someone’s name in a will as a beneficiary seems like enough. However, insurance policies don’t work that way. The person listed on the policy itself (regardless of what’s in the will) gets the money. That’s why policy updates matter more than will revisions when it comes to life insurance.
Digital Assets Get Left Behind
Digital lives are growing fast, yet estate planning hasn’t caught up. Most wills don’t account for digital assets at all. Tech platforms don’t recognize generic legal language, and access gets blocked. Without specific clauses or digital executors, families get locked out. Even in states where digital executors are allowed, they’re rarely included.
Term Life Insurance Might Pay Nothing
A term life policy sounds solid: coverage for decades and peace of mind. Well, here’s the catch: if it expires while the policyholder is alive, there’s no payout. It’s pure risk protection. Some policies offer a refund of premiums, but they’re costly and less common.
Probate Can Change What Your Will Says
Everything might look settled when a will is neatly filed away. Still, after death, probate courts have the final say. If the will has unclear language or wasn’t properly witnessed, parts of it may be invalidated. Handwritten wills, in particular, rarely hold up. What follows can be months of legal back-and-forth.
Minors Can’t Inherit Insurance Directly
Leaving life insurance to a child may seem loving and straightforward. Yet insurers won’t hand over large payouts to minors. Instead, courts step in. Guardians are appointed, or funds are put in trust; both cause delays. If no guardian is named, the court decides who takes over.
You Still Need A Will Without Wealth
Wills aren’t just about splitting money or dividing houses. Even people without assets can have important wishes: who cares for their kids, how pets are treated, or where their remains should go. Many assume wills are only for the rich, but that idea leaves personal choices unprotected.
Insurance Funds Don’t Arrive In Time
Funerals happen fast. Life insurance does not. Most families find that payouts don’t come in time to cover urgent burial costs. Some turn to credit cards or take out loans just to cover basic services. While “expedited” payouts exist, they involve tight conditions and extra steps.
One Will Might Not Be Enough
Although multiple wills sound messy, sometimes it’s necessary. People who own property in more than one country may need separate wills for each jurisdiction. Different legal systems handle estate documents in different ways. If those wills contradict each other or overlap, it causes confusion and legal headaches.
