September is National Life Insurance Month. A family really cannot do without life insurance. Being young is the best time to buy life insurance. The younger you are the less you will pay.
You need life Insurance before it needs to be used, meaning before it needs to be used on your behalf. If you are the prime source of your family’s income you should be insured. If your spouse works they also need life insurance. Are you a partner in a business? Each partner needs to be insured to cover any loss in the untimely event that they have departed their earthly presence. How much insurance do you need? Ideally one needs an amount equal to current debt, monthly expenses times 24, the financial needs of children (under the age of 18 or 26 if in school) through secondary education and your spouse for a duration of their expected lifetime in the event they will not be able to work. The former is an ideal target goal. Every family situation is unique. If the spouse also works the computation and needs change. When the family dynamics change new needs arise while others may be no longer necessary to cover. More than a few policies today can be converted into an income generation vehicle later in life. That income later in your life vehicle proves to be a valuable asset.
Listening to people as they explain how they and their families were catapulted into poverty after the tragic loss of a loved one made me realize that too many people are not protected. Many people do not have enough coverage. Those that have company provided or subsidized insurance lose that insurance when they leave that organization. Some lose employer life insurance as the result of a merger or buy-out of a company. Some lose employer life insurance when they retire.
If employees had invested in life insurance individually, the policy is active as long as the premiums are paid. Buying life insurance when you are young is the best premium you can get. Some life policies accumulate cash value. Some life policies allow you to borrow loans from the cash value. Some allow for inclusions or “Riders” that include double indemnity, long-term care and home health care additions. Some policies easily convert into income generating vehicles to supplement your retirement income. In some cases it may be the only income.
Selling AH&D (Accident, Health and Disability) added to auto loans in the 1970’s, 1980’s and 1990’s helped more than a few families make ends meet. It was so rewarding to be thanked for making sure they were covered. To those that benefited from the additional coverage, it was in place when they really needed it.
Today there are plans that can be tailored to the needs of most individuals and families. There are many plans that fit even the tightest budget. The average funeral cost is between $8,000.00 and $12,000.00. Cremation is also costly. The average Cremation with a memorial service is $3,250.00 and higher. The average Direct Cremation is $500.00 to $2,000.00. The funeral costs are in addition to any medical costs associated with a sudden death. Many times the cost to replace the financial contribution or the reliance of a lost one has a value most do not equate in their calculations. A stay-at-home spouse has a monetary value. A relative that is a care taker has a monetary value. If and when the loss of that spouse or caretaker happens the cost to replace their monetary value can be quite steep. The cost to replace their companionship is priceless. The legal system can take years if a settlement is even a possibility. Add children and elderly relatives to the equation and the financial cost needed increases substantially.