Life Insurance, Don’t Pass Your Debt Onto Your Family

How do you know if you need life insurance?  If you do not want your family to be burdened with your debts in the event that you tragically die unexpectedly, you need life insurance.   If you want your loved ones to be free from all financial burdens upon your death, you need life insurance.

Life insurance should actually be called love insurance.   If you love your family, you buy life insurance to protect them financially in the event of your untimely death.    If you love your family, you buy life insurance so that the money from the life insurance policy will cover those expenses that you planned for plus those expenses that you could not anticipate.

Do you¬†know what expenses¬†your family will be left to cover if you do not have¬†life insurance?¬†¬† If you don’t know, you should.¬† See the following¬†detailed list of reasons¬†why you personally need life insurance.

Reason #1 for Life Insurance – Funeral Expenses.

  • Funeral expenses can start at $7000.¬† Most¬†individuals do not have $7000¬†immediately available.¬† ¬†Life insurance¬†is most often¬†used to pay for funeral expenses because the life insurance policy is an immediate source of funds.
  • There are many companies that your loved ones will have to work with in the event of your death (funeral home, flowers, etc). These companies can sometimes set up payment plans; but they generally need payment for their services¬†as soon as those services are rendered.
  • Do the right thing, buy enough life insurance to cover for funeral expenses, so your family is not left in a financial bind.

Reason # 2 – To Pay off your Mortgage.

  • Anyone who has a mortgage is well advised to have¬†enough life insurance to pay off the mortgage in case of an untimely death.
  • Without life insurance coverage, your loved ones are burdened with the mortgage payment, which they may not be able to afford, in which case they lose the home to foreclosure.
  • If you die, unfortunately,¬† the mortgage company doesn’t waive your mortgage payment, mortgage company’s still need their¬†payments; if they don’t get the payment, they take the house.
  • Do the right thing, buy enough life insurance to pay for your mortgage, so your loved ones do not lose their home.

Reason #3 – To Cover Domestic Tasks.

  • Parents with kids need life insuranceParents need life insurance to pay someone to perform their tasks if they die prematurely.
  • Stay at home parents or working parents¬†perform certain tasks for the family and have certain responsibilities and that value would have to be replaced.
  • If there are children involved, someone would have to be hired¬†to cook, clean, shop, usher the children around, plus other domestic tasks that are handled by parents of the household. These duties do not just disappear¬†because one parent dies.

Reason #4 – To Raise Your Children.

  • Parents need to raise the children even if one of the parents tragically dies unexpectedly.
  • If the deceased parent was a¬†bread-winner of the family, life insurance¬†could replace the¬†income lost on account of their death.¬† ¬†Life insurance to cover the lost income is especially critical if there are young children involved.

Reason #5 – To Pay off Outstanding Debts.

  • If you are in debt¬† –¬† you need life insurance.¬†¬† You know your own debts….it can be from student loans, auto loans or home equity loans.¬†¬†¬†¬† The debt could also be from credit card balances.¬†¬† If you do not provide your loved ones with the money to pay off these debts, they could be saddled with that debt.
  • Unless your loved ones¬†are co-owners or co-signers on your¬† loans or credit cards,¬†they are not directly responsible for it.¬†¬† But the¬†creditors could then get their money by deducting it from your estate assets; so either way, your loved ones will pay for the debt.
  • Do the right thing – buy enough life insurance to cover your debts.

Reason #6 – Current College Debt/Future College Costs.

  • You may personally¬†have some outstanding college debt.¬†¬†¬† Life insurance will pay off that debt if you should die while it is still outstanding.¬†¬†¬†Some college debt can be quite substantial; you need life insurance to spare your loved ones the financial burden of that debt.
  • If you have growing children you need life insurance to pay for the child‚Äôs educational expenses through their college years.
  • You can buy a “term” policy on yourself with a¬†term long enough to last¬†through their college years, maybe a 20¬†year term policy.
  • Or you can¬†buy a life insurance policy on your child when they are very young that will help pay for their college expenses; this would be the type of life insurance policy with cash value build up.

So who needs life insurance? Practically everyone has a need for some type of life insurance.   Whether you are a mortgage holder, a debt holder, stay at home parents, working parents, college bound kids Рyou have some type of need for life insurance.

How much life insurance you need and what type of policy is on an individual basis. Call your personal life insurance agent for advice on which type of life insurance policy would best cover your personal needs. Ask the insurance agent to prepare a financial needs analysis for you to determine the amount of coverage you would need.   Also have the agent quote you on different policy types Рterm and cash value.  Do the right thing, buy love insurance to protect your loved ones.