The financial fallout after a pandemic has increased feelings of anxiousness towards the future. The world is focused on the here and now. Financial planning may not even be feasible for some stuck in survival mode.
In fact, nearly 80% of millennials surveyed do not have a will in place, with a quarter of that number noting that a lack of assets is the reason why. We get it; times are tough. However, life insurance could be vital in creating financial stability for the future.
Protecting Loved Ones and Assets
If you’re raising a family, have a spouse, or run a small business, you have other people counting on you and your earning potential. Some debts, such as a mortgage, don’t automatically go away when you pass.
Even with a tight budget, life insurance policies can protect your loved ones and leave them with a way to continue paying bills. Term life insurance is one of the most affordable options. With a term life insurance policy, the people you care about can:
- Pay off a mortgage debt.
- Cover funeral and burial costs.
- Keep a small business running during the transition.
- Cover credit card debts or loans.
Leave an Inheritance
In general, leaving an inheritance for children is important. Without life insurance, your assets may go towards paying a debt that you owe. If you pass away while in debt, your family may need to sell your physical assets to satisfy the outstanding balances.
On the other hand, a life insurance policy can cover existing debts while also providing a financial future for your children or spouse. Your children can set aside a nest egg for future expenses like college or a down payment on a home.
Estate Planning
Retirement planning on top of existing financial obligations may be difficult. Investing in private retirement or opting for the maximum contribution may take a secondary priority when life is happening now.
In addition to some policies, like permanent life insurance and having a cash value option, there are other advantages to planning your estate with life insurance. You can borrow against the policy to supplement where private retirement falls short.
After you pass, there will still be additional financial obligations. Planning your estate with the payouts of life insurance provides advantageous tax-benefits, including:
- Offset the burden of inheritance tax, as life insurance is generally exempt.
- The continued support of minor children or people with disabilities.
- Help cover expenses during the process of probate.
- Help equalize heirs of an estate.
Final Thoughts on Life Insurance and Financial Stability
There are certain guarantees in life, and death and taxes are two. Planning for your loved ones’ futures may be difficult as life takes all that it demands. While you’re out making your living, consider life insurance as a way to protect those you love and your investments in the event of your passing. Speak with one of our knowledgeable agents at PHP agency to get a quote on an affordable policy.