February is Insure Your Love month! Purchasing life insurance is a way to show your loved ones you care by protecting their financial security and giving them peace of mind. Here are four ways you can show your love with life insurance.
1. Provide For Your Family.
The first time many people consider life insurance is when they start having children. Parents understand the time, money, and effort it takes to raise kids to adulthood and want to make sure the job gets done right even if they can’t be around to finish it. If you were to die prematurely, life insurance could help your family maintain its current quality of life, whether you’re a breadwinner, a homemaker, or a combination of both. A death benefit can be used to pay for child care and educational expenses as well as replace lost income.
Even if you aren’t planning to have children anytime soon, life insurance can help protect your spouse or partner, as well. If you share expenses and household duties, your contribution would be missed. An analysis of the value of homemaking estimated that the annual economic value of common non-child-related housekeeping tasks totaled more than $60,000 in 2012. If you were suddenly removed from the picture, a financial cushion could help ease the stress of adjusting to life without you.
2. Pay Your Debts
For the most part, others won’t be liable for your debts after you die. Generally, unpaid debts will become part of your estate and are paid from the estate before it’s distributed to your heirs. There are cases, however, when other people can be held responsible for debts you leave behind, even if there’s nothing in your estate to cover them. Examples include
- Co-signed home or auto loans
- Joint credit accounts
- Co-signed private student loans
- Specific debts owed by a deceased’s spouse under some state laws
- Bills related to jointly held property
- In community property states, a spouse may be required to use community property to pay debts
Having a life insurance policy in place can allow your loved ones to cover any debts you may leave behind.
3. Address Funeral Costs
If you’ve never thought about it before, the cost of a funeral may come as a shock. A study by the National Funeral Directors’ Association found that in 2019, the median cost of a funeral was $7,640 with viewing and burial or $6,645 with cremation casket and urn. Considering that just 39% of Americans have enough in savings to cover a $1,000 expense, unanticipated funeral expenses would come as quite a financial blow to most. Purchasing life insurance can allow your loved ones to make arrangements to honor your memory without having to bear the heavy cost burden.
4. Pay it Forward.
If you want to spread the love even further, you can also use life insurance to benefit the causes that are close to your heart. There are a number of ways that you can support a charity with a life insurance policy:
- Donating dividends from your whole life policy
- Adding a charitable gift rider, making a percentage of the policy’s face amount payable to the charity of your choice
- Naming a charity as a beneficiary
- Transferring ownership of your existing policy to a charity
However you show your love with life insurance, doing it sooner rather than later will have the greatest impact. Purchasing life insurance while you’re young and healthy ensures you’ll get the lowest possible premiums. If you buy a whole life policy, this also gives its cash value more time to grow.
ELCO Mutual has been helping our customers find the right insurance solutions for 75 years. For more insight on insurance, annuities, and their benefits, subscribe to our blog!
