What is it they say? There are two certainties in life: death and taxes. A morbid topic you might say, but it’s never too late to start planning for the inevitable. There’s a lot you can do to lessen the burden on your loved ones once you pass – at the very least preventing the financial burden of paying for your funeral upon your death. Jay Davis at Country Financial gives Eighteen21 the lowdown on life insurance.
No one wants to talk about death, but often it’s too late to protect those we love. I’m talking about life insurance, of course. I was recently in a restaurant where a flyer on display featured a fundraiser for a family because the husband had died, he’d not had life insurance, and they were facing difficult times. My biggest responsibility as an insurance advisor/financial representative is to ask the tough questions and make recommendations regarding life insurance. If I don’t at least ask the question then I’m doing a huge disservice to my clients… I don’t want to get a call from a widow/widower asking me why I never mentioned life insurance to him or her.
Today's coverage is no longer the death insurance policy of yesteryear. There are now living benefits offered, which guard against chronicle, critical or terminal illness during your lifespan, and allow for access to the majority of the death benefit while you are still alive.
As well as covering the cost of a funeral, north of $10,000, life insurance can be used to replace income, provide your family with funds when they need them most, replace the value of an asset, pay estate taxes, maximize your pension or social security benefits, fund college for the kids or grandkids, buy out a business partner and protect a business for the replacement value of a key employee.
If you already have life insurance through your work it won’t do any harm to have a professional review your policy because employer-provided life insurance has limitations. Your insurance needs should also be based on the assets you have to protect the needs of your dependents – not just your salary. Odds are that your family will not be able to maintain their standard of living after your death – and even if you are not the breadwinner there’s absolutely no reason why you shouldn’t have life insurance to allow your family time to recover and stabilize income and expenses.
Life insurance also provides debt protection, as most debts will be transferred to your family, such as a mortgage, car payments, and outstanding credit card debt upon your death.
If you decide to buy a form of a permanent life policy, rather than a term life policy, you’ll have a cash value component that serves as a guarantee. This not only covers your family in case of your death, but it could also provide a guaranteed income during your life. Permanent life insurance is not an investment; however, it is a cornerstone of any retirement plan. It is the only thing in the financial world that is guaranteed.
Finally, life insurance provides peace of mind knowing that your family will be taken care of when the inevitable happens.