However, as you grow older you will see that life insurance, while it may not directly benefit you, does benefit the people closest to you for years to come.
Funeral Preparations
Unless you have personally planned a funeral before, you may not realize that they can cost thousands of dollars. Most people will have money saved up to pay for college or a home, but not to pay for a funeral and all of its costs. The money from a life insurance policy can help to cover much of the cost. Most people agree that making it through the grieving process becomes easier when there is a designated time for family and friends to be together at a funeral service. If there isn’t funding for a funeral though your loved ones will miss out on this opportunity.
Standard of Living
As an adult, there is a good chance that you have a spouse and children who rely on you financially. When you pass away it will be difficult for them to make up for any source of income which you provided. Life insurance will allow your family to maintain their standard of living rather than having to make significant lifestyle cuts because they can’t afford basic needs without your help. By having a life insurance policy, you can continue to provide for your family even when you’re no longer there.
Posterity
Before you assume that you don’t need a life insurance policy, consider how it could affect your children twenty years down the road. Your children will probably need your help with paying for college, especially when you consider the rising cost of tuition. If you aren’t around to help them, where will they get the money from? According to a child welfare specialist who earned their master’s degree in social work online, the loss of a parent can be both emotionally and financially devastating for their children. If you don’t have a policy when you pass away, you can forget about being able to assist your children through some of the most financially trying years of their lives.
Even if your children are grown, a life insurance policy could still affect them. If you have them listed as the ones who will inherit your estate, they will need to pay a tax up to 45% of your assets. If you pass abruptly they may not have the money for this payment. Your life insurance would be able to cover most or all of this payment for them.
Charitable Donations
Even if you don’t have children, a spouse, or outstanding debts to take care of, a life insurance policy could still do you good. It is possible to have a policy that will leave the money to a pre-designated charity. This is a good option for those who are financially stable or do not have people they are financially responsible for.
Not having life insurance could be one of the biggest mistakes you can make regarding your finances. While not having life insurance won’t affect you personally, it does affect those you love and care for. Choose the appropriate policy for your needs so that when you pass your family won’t be left with an extra burden.
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