The rank and file of the middle class generally views life insurance as one of life’s necessities. For many people, it should be a part of their long term financial plan. Buying life insurance is perceived to be more a matter of how much insurance to buy than whether to buy it. By considering a few practical tips, you can determine if buying life insurance is right for you and your family.
Your family may need time to adjust financially to your loss.
Almost everyone who dies creates a financial change for their survivors. At the very least, some sort of disposition is needed for the body. Even the donation of a body to an institution can incur some cost, and they have to agree at the time of death to accept it. There are costs involved to clear up titles to real estate and personal property. The big one can be the loss of income that was generated by the deceased. These amounts need to be considered when deciding whether or not to buy insurance and how much to buy.
Will your survivors need additional education?
If you are going to leave behind a growing family, there will educational costs coming along for the children. Your spouse may need to gain more education to be able to support the family. This takes time and money. Insurance can help bridge the gap for both of these areas.
Debts may need to be resolved.
Unless you are debt free, your estate will need to cover outstanding debts before any of it can be distributed to your family. It is just good planning to have at least enough life insurance to retire these debts. Subtract these debts off of the amount of your life insurance to see if enough will remain to meet the other immediate needs of our survivors.
Insurance can provide a home for your spouse.
If you have enough life insurance to pay off the mortgage, you will not have to worry about your spouse having a roof to live under. Some people buy specialized life insurance when they purchase a house. It has a decreasing value and level premiums so that the amount of insurance always equals the outstanding mortgage amount. This frees you to consider additional life insurance without being concerned about the size of your mortgage.
Having insurance protects your estate.
You work hard for your money. It is rare for anyone to want to spend every cent before they die. Most people take a measure of satisfaction and pleasure in the thought that they will leave an estate for their heirs. Life insurance is a way to conserve your remaining assets so that they will not be consumed by debts and taxes after you die. Even if your estate is completely exhausted by these amounts, the insurance can replace those funds in the value of your estate.
Life insurance is a way to tell your family that you care.
Does it bother you if your family will be okay after your death? Life insurance is a type of legacy that carries your care beyond your grave. If this matters to you, life insurance is a good option to consider. Almost all creditors are willing to wait without becoming aggressive about their money if they know that life insurance will be forthcoming to resolve the outstanding debt.