As the New Year is right here, you should be all geared up with your financial planning strategy. Plus, covering yourself with life insurance should be your top priority is you haven’t already done it till now. Though it isn’t always pleasant to think about the adversities that your loved ones may have to face if you die suddenly, proper planning is still a more practical approach to the situation.
Life insurance can cover them for the loss of your income, pay off your outstanding debts and even offset your funeral expenses in the event of your death. Simply speaking, this one decision can protect your family if you die unfortunately and also give you peace of mind while you live. There are plenty more reasons why you should buy life insurance in 2020. Let us list them down for you.
Perhaps the single most important reason why buying life insurance makes sense is that it is a reliable means of income replacement for your spouse and family. If your current expenses stand at a certain value and that income goes away suddenly, how does your family expect to survive? And if they do survive, how long can they manage? There is always the fear of the worst happening if the main earning member of the household dies suddenly. The surviving members may have to compromise with their lifestyle, lose their home and move the kids to a cheaper school. Getting yourself covered with life insurance is definitely a good strategy to prevent such contingencies. Unfortunately, sometimes things can get complicated even with life insurance, so it’s not surprising that life insurance beneficiary disputes occur rather frequently. Make sure you list your beneficiaries properly to avoid a potential conflict.
If you are married and owe money at the time of your death, the burden of your liabilities will fall on your spouse. These debts may range from credit card bills to business loans, car loans, and home mortgages. Obviously, this can be a major expense that they may or may not be able to pay off comfortably. By getting yourself insured, you can be at peace that these debts will be covered even when you are not there to pay them off. Your spouse can use the claim to easily repay the debt and get their finances in order.
Daycare expenses of young children
Daycare for young children is one of the major expenses for such families. If one of the spouses dies, the surviving parent will probably have to work to sustain the household. This means that daycare will be an essential expense until the little ones are old enough to start with pre-school. Having life insurance gets you covered on this front as well. You should at least have enough to provide for the daycare fees of the children while your spouse goes to work.
Whether your children are young or old, life insurance keeps them safe from financial hardships. According to Life Insurance Agent, Ty Stuart, every parent should have at least an optimal value of life insurance to provide coverage for a few years of college tuition. You would not want them to work through the college years to pay their fees or expect them to get a scholarship every year. And student loans can be a burden that you wouldn’t want them to bear. Your kids’ college planning is, therefore, something that you should prioritize while planning your finances in the long run. Getting insured is surely the smartest way to cover their education.
Partnership business planning
If you run a partnership business, life insurance is a smart business planning strategy. You may want to buy your partner’s share in case they die but financing the transaction may be tough. Having insurance to buy their share definitely provides you enough so that you can own the business completely rather than be stuck in a partnership with their family members. So it definitely makes a smart approach to protect your business interest.
Another good reason to buy life insurance in 2020 is that it will help you get a decent funeral service. Though your burial is something that you wouldn’t want to think about, it is worth considering that even a basic funeral costs thousands of dollars these days. Obviously, this is a cost that your family will have to bear whether they are financially capable of doing so or not. If you get yourself insured, you can reduce this burden off the shoulders of your loved ones.
Giving your family financial assistance in case you die is not the only reason for taking life insurance. You can also use one to diversify your investment portfolio smartly. This is done by investing in specialized policies that work as an investment tool. You can use it for long-term financial planning to cover major life events such as retirement planning and home planning. Such policies are linked with an investment product that pays dividend payments to the policyholders on the basis of its performance.
Payment of estate taxes
The benefits extend much beyond financial safety and long term financial planning. Having a life insurance strategy in place is a good idea to pay off estate taxes which can be significantly steep. So you can them smartly to avoid endangering the assets or funds you build as a part of retirement planning. This strategy is useful for large estates in particular. The best approach is to invest in permanent insurance, rather than term insurance, so that you get optimal coverage till the end of life.
Considering these reasons, taking life insurance should surely be on top of your financial agenda in 2020. The best reason is that it does not cost a fortune; rather it is just a small price to pay for the peace of mind that your family will have enough financial support if something unfortunate happens with you. Now that you know that you must absolutely get insured sooner rather than later, buying the right policy and getting an adequate cover are both equally vital. Also, you should compare different kinds of policies in the market and find the one that serves the best benefits in your case.