Life Insurance May Be Optional, But Get It Anyway
Life insurance seems like this mythical blessing out of movies for people who haven't really looked into it. Once you do start to study the plans available, though, you quickly realize that it is not mythical, and it really does provide money for your beneficiaries after you die. Then you take a look at some policy premium amounts and wonder if you can afford it. There is good news: You can likely afford it if you find the right insurance agent and the right plan. You'll be glad you made the effort because even a little life insurance can help your family while they reorganize their lives after your death.
Relatively Fast Money for Family After You Die
Life insurance provides relatively fast money after you die. Your family will need to present your official death certificate to the insurance company, which could involve waiting a few weeks to get the official copies (they might get draft copies a few days after your death, but those aren't usable for insurance purposes). Despite that wait, money from life insurance shouldn't take months to arrive, nor should there be complicated distribution or tax issues. These policies are meant to pay out and nothing else once your family makes a claim and presents your death certificate.
Keep Time and the Economy in Mind
You never really know when you're going to go, which means your children could be any age, the economy could be in any shape, and so on when it happens. Having a life insurance fund waiting for your family lets you remain a little calmer about what would happen to them when you die. When you choose a policy and coverage amount, consider just how the economy could change over time; things are likely to get more expensive, of course, and you want to ensure your family will have money to cover the basics at least. Think about what they'd need today and then increase that amount in the coverage. If you have young kids and fear you'll die before they grow up, and you want them to go to college without having to take out loans, increase the coverage by a lot.
Also consider how long you'd want to support them. Maybe your kids are grown (or you don't have any) and your spouse has a solid job of their own; you could have a smaller life insurance policy meant mainly to pay back your spouse for covering funeral costs and administrative costs associated with settling your estate. On the other hand, maybe you have a stay-at-home spouse with two small children, in which case, you'd want a much larger policy that could support them for years as they recover from your death. As you plan your estate, now would be a good time to pre-plan and pre-pay for your funeral. Your family will still have to pay some costs associated with that at the time of your death, but pre-paying will help and will free up life insurance funds when your family receives their payout. They won't have to turn around and give much of the money to a funeral home.
Life insurance policies might not be legally required like car insurance, but they are so helpful in so many ways that you will want a policy anyway. If you're not sure you can afford one, speak to your insurance agent because there are a range of options to help you buy coverage.