Money Talk: A parent had life insurance, but the companies are gone. What to do?

Dear Liz: My mother died last year. I discovered she had two old life insurance policies written by companies that no longer exist. How can I determine which modern insurance company is responsible for policies written by these old companies? How can I submit a claim? My mother was born in 1932. The first policy began 1939 for $350. The second began in 1943 for $600.

Answer: It’s not a given that a modern insurer still has these policies, but it’s possible. You can start by entering the old companies’ names in an internet search engine to see whether new owners are mentioned in the results. If that doesn’t work, contact the insurance department in the state where the old company was headquartered because it will have records of mergers or other changes.

If the company went bankrupt, you’ll need to consult the guaranty association in the state where your mother lived. State guaranty associations protect policyholders when an insurer defaults or becomes insolvent. The National Organization of Life and Health Insurance Guaranty Assns. has a search tool you can use to find the correct association.

Another option is to check the life insurance policy locator service offered by the National Assn. of Insurance Commissioners at https://eapps.naic.org/life-policy-locator/#/welcome. You’ll need to input your mother’s Social Security number as well as her dates of birth and death.

Also check the unclaimed property offices of any states where she lived. You’ll find links at unclaimed.org.

Beware the insurance salesperson in financial planner’s clothing

Dear Liz: Do you have any general advice for choosing a tax preparer? My financial advisor has recommended switching my 403(b) contributions over to Roth 403(b) with the same investment plan. I am worried that this could put us at risk for a higher tax bracket currently.

Answer: Ideally, a financial advisor wouldn’t recommend switching to a Roth option without knowing a fair amount about your current and future tax situations. Otherwise, the advisor wouldn’t be qualified to determine whether giving up the current tax break is likely to pay off later.

Unfortunately, not all financial advisors are truly qualified to give the advice they do. Some, particularly those advising people about 403(b) investments, are insurance salespeople rather than fiduciary financial planners.

You can get referrals to tax pros from the National Assn. of Enrolled Agents and your state’s chapter of certified public accountants. (The American Institute of CPAs has compiled a list of those at its website.) Both enrolled agents and CPAs are fiduciaries who promise to put your best interests first.

For broader financial advice, consider getting referrals from one of the organizations representing fee-only fiduciary planners such as the Garrett Planning Network, the XY Planning Network, the National Assn. of Personal Financial Advisors and the Alliance of Comprehensive Planners.

Also, teachers should consider spending some time on the nonprofit 403bwise website, which grades school districts’ retirement plans and seeks to educate teachers about the costs of trusting the wrong people.

After her husband died, a widow’s credit limit plummeted

Dear Liz: You’ve mentioned how important it is for spouses to each have credit cards on which they are the primary account holder. My husband died last year. We had a credit card with statements that showed the charges we each had made on our separately numbered credit cards. I found the account was in his name only. I had to get a new credit card in my own name, and the credit limit dropped from $75,000 to $7,000. Hope this warns others.

Answer: It bears repeating that most credit cards these days are not joint accounts. If two of you are using a card, one is probably the primary account holder and the other the authorized user.

After a primary account holder dies, credit card companies are often willing to work with surviving spouses who were authorized users to establish new accounts. But as you experienced, the credit limits for these new accounts may be much lower than those of the original.

Liz Weston, Certified Financial Planner®, is a personal finance columnist. Questions may be sent to her at 3940 Laurel Canyon, No. 238, Studio City, CA 91604, or by using the “Contact” form at asklizweston.com.