Will your family face financial trouble if you were to pass away?
Would your spouse be able to pay off the house?
Would your kids have college paid for?
Would they have enough money for burial expenses?
Do you have enough life insurance?
Do you have the right type of life insurance?
These are all questions you need to think about when weighing the options of life insurance. Unfortunately, no one beats the grim reaper. It is not a fun topic to think about, but it is a certainty. Planning and buying the right amount of life insurance is an important aspect of estate planning. Life insurance is not for you, it's for your family. Here are the top 5 reasons to have a good life insurance policy in place.
LIFE INSURANCE WILL REPLACE YOUR INCOME
In your absence, Life insurance policies are meant to replace your income. We recommend having life insurance that is approximately 10 times your annual income. This ensures that your family will have enough money to supplement income and get through the hardest time of their lives. Have 10x annual income allows your spouse to pay off the house and any other debts. It is one less thing they have to worry about while grieving.
PEACE OF MIND
Once you get your policy in place, you are awarded a sense of assurance should you die. Having that peace of mind is worth the price of admission. If you buy the size policy we recommend your spouse should be able to pay off all debts large and small, from a credit card to the home mortgage. Hopefully the remainder will allow your spouse to have enough to live on for a few years while trying to adjust to the single life...or attract a new spouse.
PAY FOR FINAL EXPENSES
Life insurance accounts for your final expenses. Everyone knows that medical and burial expenses are constantly increasing. Burial expenses alone can run well over $10,000. There are final expense policies offered for sale but we don't typically recommend them. Having a good life insurance policy will offer your family enough money to honor your life as well as relieve the financial burden that can place on your family.
PAY OFF DEBT
When you die not all debts die with you. Most of the time your family will still be liable for them. Anything you and your spouse have co-signed on will still be outstanding. If you still have outstanding debts they may be left and creditors will be calling your family demanding payment.
When we get older and start having families and building businesses we start to think about estate planning in a different way. Life insurance needs to be one of the first things you start looking at when estate planning. A life insurance payout could leave your family with enough to cover all current expenses, pay off all debts and hopefully leave something for future generations. We are called to leave an inheritance for our children's children and life insurance is one way to ensure that.
Now that you know life insurance is absolutely necessary, you may have questions as to what kind of life insurance to purchase. We recommend term policies only! Do not get a whole life policy. The premise of whole life is great but in reality they don't work. If you invest the difference between term and whole life premiums into mutual funds you will always come out ahead. Insurance is not an investment and shouldn't be treated like one. Life insurance is affordable, 75% of Americans think that life insurance is 3 times more expensive than it actually is.
Contact us to see how affordable a term life insurance policy can be for you!