Many people understandably avoid thinking about the end of their life, but death is an inevitable outcome associated with living. Some people will live a full, long life. However, some people have their lives cut short through accident, illness or other issues. In some cases, individuals pass away when their loved ones are still financially dependent on them for monthly income. A spouse may need your income to fully fund his or her retirement plans. Children may require for you to pay for their college education. The reality is that your family’s current life and future plans may be incredibly dependent on you generating income for them. When you pass away, this is simply not possible, and this is where life insurance comes into play.
Life insurance provides your named beneficiaries with death benefits when you pass away. The policy can be purchased with a benefit amount that you select. Your monthly, quarterly or annual premium payment will reflect the amount of death benefits that you have selected. Many people will purchase at least a small policy to help loved ones pay for funeral expenses and any final medical bills. Many will also purchase additional benefits to pay off outstanding debts. When your benefits pay off credit cards, car loans, and mortgage payments, for example, your loved ones will have a trimmed down budget. They may be able to live more comfortably on one income. Some will also include additional benefits that can be used to supplement lost wages and to further support the family after a primary wage earner passes away.
As you can see, there are many ways that life coverage can be used to benefit your loved ones after you pass away. It is wise to review your finances today with your spouse or loved ones. Develop a financial plan for a worst-case scenario. Then, speak with an insurance agent to buy the coverage that you and your family needs. By walking through these steps, you can better prepare for the inevitable future.