It’s impossible to talk about Life Insurance without taking a moment to acknowledge the words of Benjamin Franklin: “(but, in this world), nothing is certain except death and taxes.” Death can be an uncomfortable subject for people, and it is natural to want to avoid discussing it. Yet, it is so vital to think about what will happen to the people we leave behind and how to proactively plan and prepare our loved ones to go on without us.
A report by the Life Insurance Marketing and Research Association (LIMRA) and Life Happens shows that 44% of American households would encounter significant financial difficulties within half a year if they lost the primary wage earner in the family, and 28% would encounter these difficulties in only one month. That is why Life Insurance should be a basic element of your legacy plan. It helps replace your income after you die by paying a benefit directly to any beneficiaries you choose, such as your spouse, partner, children or other loved ones.
Read more: For one family, Life Insurance education was the missing link to financial stability
Don’t delay buying Life Insurance
Perhaps you have already considered Life Insurance before and decided you were not ready. LIMRA data shows some middle-income Americans are cutting back on discretionary spending, including insurance, due to the current high inflationary environment. This financial insecurity is highest among Gen X (49%), followed by Millennials (44%), Gen Z (42%), and Baby Boomers (33%). So while you may feel the need to cut costs in hard times, it’s vital to keep in mind the purpose and importance of Life Insurance — financially protecting those who depend on you if you are no longer there. It is in these hard times that income protection becomes paramount in the event of death.
Ask yourself: “What If…?”
How heavily does your family depend on your income? Have you thought about who will be responsible for planning your funeral and settling your affairs? These are important questions to think about and discuss with your loved ones. Even if you don’t have children, Life Insurance is still important so that your partner, spouse or parents can afford to plan your funeral or pay for your loans that they co-signed and grieve your loss without the added worry of financial distress.
Read more: Life Insurance benefits are a critical yet overlooked tool in creating financial security
With Life Insurance in place, your beneficiaries will have the funds to help pay for what is needed if you are not there. Here are some expenses your beneficiaries would be able to pay with your Life Insurance benefit:
- Medical expenses
- Funeral, burial and probate costs
- Taxes and debts, such as credit card balances
- Child care
- Housing and other living expenses
- Car payments
- Property taxes
Review your existing benefits
If your employer currently offers a Life Insurance policy, check to make sure that the life benefit of that policy will cover all of your major expenses after you’re gone. If there is a gap, talk to your employer about adding coverage to fill that gap. Many employers offer Life Insurance you can purchase with payroll deductions. Every family has unique circumstances that can make it difficult to estimate needs. If you’re concerned about the cost difference, it’s important to note that eight out of 10 consumers overestimate the expense of getting a Life Insurance policy, according to a study by LIMRA and Life Happens. Take a few minutes to use this simple form to help you find the right amount of coverage to protect your loved ones.
Read more: Employers are recognizing ‘financial wellness’ isn’t just a buzzword anymore
Take a moment this month to reflect on the life you have built or are in the process of building. Recognize that dealing with your eventual death is an important part of life — and you have an opportunity today to take a proactive approach. Whether you are young and healthy, have dependents, or are childless by choice — Life Insurance is important for everyone and its benefits are there to provide peace of mind and added protection for your surviving loved ones.