Life Is for the Living, and So Is Life Insurance
Life can be busy. The requirements of work and family often
leave little time to step back and think about where you've been and where
you're heading. But as your responsibilities grow, so does the need to evaluate
what would happen if life for you stopped. September is Life Insurance Awareness Month and a good time to reflect on how life insurance can help those you leave behind — the living.
Your spouse or life partner
A successful marriage is often predicated on sharing and
providing for one another, and that includes each other's financial
obligations. If you were suddenly no longer in the picture, would there be
enough money to pay for your final expenses, cover debt, and buy some time to
allow your significant other to adjust to a new way of life? Life insurance can
provide funds to cover immediate expenses and income to help support your
surviving loved one.
You've worked hard to provide for your kids, to give them
the chance to realize their hopes and dreams. Your children are likely your
greatest responsibility — a responsibility that doesn't end with your passing.
Whether your children are in diapers or about to enter college, if something
happened to you or your spouse, or both of you, would there be enough income to
continue to provide financially for your children? Life insurance can help
provide the resources for their continued growth and maturation.
Buying a home may be the largest single expenditure of your
life. While being a homeowner is exciting, mortgage payments, often lasting 30 years, along
with maintenance, utility costs, homeowners insurance, and real estate taxes can add up to a
long-term financial commitment. Adequate life insurance protection can provide
funds that could be used to cover these expenses, allowing your family to remain in
Do you own your own business? Life insurance can fit into
your business plan in many ways. It can be part of an employee benefit program,
with coverage under a group plan. Life insurance purchased on the lives of certain key employees
can protect your company from the loss of talented and valuable workers. And
life insurance can be used to fund a buy-sell agreement.
Caring for an aging parent or loved one
caring for an aging parent or loved one? Would the people who depend on you
be able to afford quality health care and a comfortable place to live without
your financial support? Life insurance can become extremely important in these
situations, helping to provide for these individuals in the event of your
Planning for retirement
Preparing for retirement probably means you're saving as
much as you can in your 401(k), IRA, or other savings vehicle. If you die
before you get to enjoy your retirement, will your retirement plan die for your
surviving loved ones as well? Not only will your salary be unavailable to help
pay for current living expenses, but your income won't be there to build the
nest egg for the retirement of your spouse or life partner. Life insurance can
help provide funds that can be used for your spouse's or life partner's
Your health has changed
If your health declines, how will it affect your life
insurance? A common worry is that your insurer could cancel your coverage should your health change. However, changes to your health will not affect your current insurance coverage, provided you continue to pay your premiums on time. In fact, you should take a
closer look at your life insurance policy to find out if it offers any
accelerated (living) benefits that you can access in the event of a serious or
Leaving a legacy
Life insurance can be used to increase the size of an estate for your heirs. The death benefit could provide your beneficiaries with a larger legacy than might otherwise be
The cost of life insurance may be significantly less than the proceeds of the policy paid to your beneficiaries when you die.
Donating a life insurance policy to a charity may enable you to make a larger gift than you otherwise could afford. Further, the government encourages charitable giving by providing tax advantages for certain charitable donations (the charity must be a qualified charity). This means that both you and the charity could benefit from your donation (though some charities may not accept a gift of life insurance for various reasons).