September is Life Insurance Awareness month. This post is in partnership with TermLifeInsurance.com, which helps spread awareness of the importance of term life insurance. Learn more about how you can protect your family and your finances.
I was raised in military household, which meant living with the imminent possibility of a parent being sent on an assignment and not returning home. For that reason, my parents were always insured. When I reached the age limit on my parent’s policy, my mother took out a small policy on me. As I began my first job, one of the only demands my mother requested of me was to purchase a life insurance policy. We all have our different reasons for insuring the ones we love, her reason was and still is reasonable to me…She didn’t want to have to beg for money to give me a proper burial.
I have seen numerous crowdfunding campaigns of parents requesting financial assistance to cover burial fees and other costs. Every time I hear this request I am reminded of my mother’s words.
As a sentient being, I understand the emotional justification for having life insurance. As a financial educator I understand the financial significance of having adequate life insurance. Here are three reasons I encourage you to consider getting life insurance.
- It helps provide a secure future
Life insurance becomes even more important if your loved ones depend on you for financial support. This is especially true if you are a single mother, the primary breadwinner, or contribute significantly to your family dynamic (such as stay at home parents since your presence in the home relieves the family of child care costs). The death benefit that accompanies life insurance policies can replace your income and provide the financial support your family will need in your absence.
- It allows you to create a legacy
Regardless of your socio-economic status, you can leave an inheritance by naming your dependents as the beneficiaries of the life insurance policy. When used properly, life insurance policies can be an intergenerational wealth building tool. The dependant(s) could use the money to pay for their education, start a business, or invest in real estate and other means of increasing wealth. You can also create a trust where your death benefit can be deposited. It would be used in the manner at your discretion, such as the creation of a scholarship fund or a large donation to a charity of your choice.
- It covers debts and other expenses
In the event that you leave behind bills, life insurance would provide the funds to cover outstanding debts such as your mortgage and any other debts that you might share with a co-signer such as credit cards, or auto and student loans. This also includes burial and funeral costs which can range from $10,000- $20,000 dollars.
Most families do not like discussing death and estate planning, but that does not prevent death. If you don’t have a life insurance policy or are unsure of what type of insurance is best for you, visit www.lifehappens.org/. If you currently have a policy but want to make sure you have adequate coverage, contact your insurance agent or provider.