When people consider life insurance, they often think of it as a way to provide their beneficiaries with a tax-free lump sum of money that will help them get through a difficult time. But if you stop to consider what your payout might really cover, you’ll realize how much financial peace of mind a good life insurance policy can provide. There are many financial responsibilities that you don’t want to pass on if you unexpectedly pass away. Life insurance coverage helps fund these items so that your people can live a life unencumbered by the stress of making good on your financial obligations. Here are a few things your life insurance can do:
1) Offset existing debt from loans
If you are currently paying off debt, those obligations still have to be honored, even from the beyond. Payouts from life insurance can help pay off student loans from college and grad school, your mortgage and any car payments, so that your family doesn’t have to worry about footing the bill.
2) Provide for your children
Raising a child these days is not inexpensive. The cost of raising a child from birth through age 17 in the 21st century is estimated to be $233,610 according to a recent report from the US Department of Agriculture. If you have multiple children, that number gets a lot bigger. Life insurance payouts, if well-managed, can help cover the general costs of raising your children, pay for childcare, cover school tuition (private school, college, grad school) and more.
3) Cover basic living expenses
The money required to fund the existing lifestyle of those you take care of is critical, especially when they need time to regroup. Life insurance payouts can help finance day-to-day living expenses such as groceries, utility bills, recurring monthly payments for services, and then the unanticipated occurrences such as major car repairs or out of pocket medical and dental expenses.
4) Support other obligations (aging parents, friends in need, charities)
Life insurance doesn’t just take care of children and mortgages. Many people choose to get life insurance policies because there are other key people or organizations in their lives that are important to them. Providing funds to ensure that these people and initiatives thrive is part of the legacy they want to leave behind. Many get additional life insurance coverage to make sure that elder parents will have enough financial support in their golden years, when they live in assisted living. Some have a relative, friend or mentee they want to provide for when they are no longer there to give support. Others have charitable organizations, ranging from their alma mater to other non-profit causes that are close to their heart, that they want their descendants to provide for in the future.
A little coverage goes a long way…
One the biggest reasons people don’t get life insurance is they mistakenly assume it’s too expensive. Recent research has revealed 80% of people overestimate the cost of life and not by a little, but by a whole lot. Life insurance can provide support for much of what you value and hold dear, and you might be surprised by how affordable it can be. Also, with Ladder, you can get life insurance that can adjust with you as your life needs change, so you can cancel or decrease it at any time too.
If you want to figure out how much coverage you might need, use our helpful insurance calculator. We’re always here to help if you need us to help talk you through figuring out life insurance – drop us a line at help@ladderlife.com.