Do you have children?
Do you support your spouse?
Do you care for a disabled adult or child?
Are you the principal source of income for your family?
Do you have a large estate and expect to owe estate taxes?
Would you like your funeral expenses taken care of in the event of death, without burdening another?
If you answered yes to any of these questions, life insurance is a smart move in your estate planning. Ask yourself: If something were to happen to me unexpectedly, how would my family manage?
Here’s what having a life insurance policy can do in the event of your death:
1. It can provide immediate cash to settle your personal debts—funeral and burial expenses, credit card balances, healthcare expenses not covered by insurance, even your mortgage. (You can choose a policy, for instance, that matches the length of your mortgage payment period.)
2. Your dependents will be cared for financially and able to maintain the same standard of living.
3. Pay for your children’s college tuition and costs. If, in the event you are alive when your child enters college, you can use the policy’s cash values to pay for some or all of the tuition. (Think of it as withdrawing from a bank account.)
4. Your beneficiaries can avoid probate and estate taxes. The beneficiaries on your life insurance policy may receive instant cash settlements, as well as limit their tax liabilities.
Here are some questions to answer before purchasing a policy:
- Who are my dependents?
- What are their current financial needs?
- What are their long-term financial needs?
*Remember, the needs of younger children will be substantially more than college-age children.
There are many policy options that can be tailored to meet your family’s particular needs. The younger you are, the cheaper your rates will be. The most common mistake people make is to be underinsured. Make sure you speak to a qualified insurance broker who can answer all your questions. Keep in mind that the purpose of having a life insurance policy is to provide for the living, and that can be a tremendous source of comfort.