As a financial planner, there are a lot of things I can do for my clients. I can help you save money, create an emergency fund, invest for the retirement you want, and even help you make more money in some cases. These are the things we discuss when I sit down with my clients. From where I sit, the ones mentioned above are up to the client. The one thing that I press hard on and think is the most important thing you can do for your family is life insurance. Death comes to us all. There is no avoiding it. But most people don’t want to talk about it. They avoid the subject like math class (no offense to mathematicians). But by avoiding it, we set our family up for a truly miserable experience if we die early. When my family couldn’t afford to invest in anything else, we still got life insurance. Here are three reasons that I believe life insurance is the most important investment you can make right now (not right now as in the general time period, but right now as in call me as soon as you’re done reading this.)
The average cost for a funeral is about $7,000-$10,000. Does your family have that amount saved up in case somebody dies? Probably not, especially if the amount of gofundme campaigns I’ve seen to pay for funerals in the last year is any indication. Your family has just lost you. They should be grieving, but instead they are standing on street corners or starting gofundme pages to try to pay for the funeral that has caught them off guard. Maybe they open a new credit card or use an old one to pay for the expense and then have to pay down that debt for the next 10 years, a constant reminder of that day. It adds to an already stressful situation when the family has to figure out how they are going to bury you. Let your family grieve as they are meant to do.
2. Your family has to survive
This is especially true if you are the only one bringing in money every month. How is your family going to eat and pay bills with you gone, especially in the immediate? Life insurance can help pay your bills for your family until they are finished grieving, and even beyond. You can have your bills paid for multiple months with your life insurance and it doesn’t cost you as much as you think per month. Think of the relief that your family will have knowing that they are taken care of and they can mourn without worry. What greater gift can you give your family than taking care of them when you are no longer around?
3. Your family has to pay off debt
Debt is a slave driver. It looms over our heads, putting pressure on us constantly. With life insurance, your family will be able to pay off all of their debt and just pay the monthly bills (see reason #2). Life insurance can help pay off your house and your credit cards and let your family start from scratch with their finances. Again, it allows them to grieve over losing you and not have to immediately think about how they are going to survive.
When I sit with a family to talk about life insurance, I generally look at 4 things, using DIME as a mnemonic device. I look at Debt, Income, Mortgage, and Education. I don’t just pick a random number out of a hat and try to sell you that much life insurance. You choose which of the four you want your life insurance to pay for. I can also help you plan out your future by giving you a road map for how to get from where you are to where you want to be, including savings, retirement, and emergency fund. Best of all you never pay me anything out of pocket for these services. If I’m able to help you, the product providers pay me. Visit the Contact Us page to set up a time to talk with me about these things. The last thing that I want to mention is this: many people think they have life insurance through their job when what they actually have is Accidental Death and Dismemberment insurance. They are not the same thing. With ADD insurance, you have to die in a pretty specific way in order for it to pay out. Make sure you know what you have and don’t assume.
Be blessed everybody.