Life insurance can be a touchy subject to bring up to most people. However, with the rising costs of funerals skyrocketing, one must plan immediately for their future to protect their loved ones from incurring a financial strain. Most seniors feel that they have enough insurance already, and a lot do. There are more things to consider, though, then just a funeral. This will explore the different ways that life insurance can help you protect your assets and pass them along with ease when you pass away.
The top priority for all seniors and their life insurance plan should be an adequate amount of insurance to cover their burial and funeral costs. With costs of funerals going up and up every year, seniors really need to plan for the future. What may be good today probably won’t be good ten years down the road. Funerals cost anywhere from $8,000-$12,000 for an average funeral, which is quite a bill. Most seniors do not want to leave this kind of burden to their children, and should purchase an insurance plan that will cover the funeral costs plus a little extra for unexpected emergencies. Set up a time to talk to your current life insurance agent as soon as possible to go over what you have currently and also to discuss a possibility of raising that amount if you do not think you have enough. Many insurance companies have great programs for seniors that are affordable and easy to qualify for, unlike traditional insurance in which you have to take physicals and medical tests. Once you determine what the right amount for you is, also make sure that it can fit in your budget. While taking care of your life insurance plan is a great step, you need to be able to afford this important coverage. Also, check over the policy very carefully and make sure to ask some very important questions, which I have listed below:
Is this a permanent or whole life policy? This is the only type you should buy as a senior. Will the rates be subject to an increase or are they a steady rate? You want to buy a policy that has the same rate for the rest of your life. While others may be cheaper in the beginning, this is usually just a teaser rate and will rise in three to five years. Is the death benefit payable immediately? With some senior insurance programs, the full amount of the death benefit is not available in the beginning. Some other just a return of premium for the first couple years, then move to 50% of benefit for the next few years, and then finally you get the full amount after waiting three to five years. This can be beneficial if you have some serious health problems and no one else will insure you, but if you are in decent health with no major health problems, you should not have to worry about this and receive a full death benefit immediately.
These three questions are extremely important to ask and know before you decide to purchase any type of life insurance. You should receive a positive answer on all three of these answers and also see it in writing. Do not take the word of the sales person, as many are just in for the money and really do not care about their clients. They will do whatever they can in order to secure a sale and will falsify information to make you happy.
Another important aspect of planning for your future is the excess cash you have on hand and how liquid it will be to your heirs. Probate, which is the settlement process which freezes your assets, can take between 6-18 months. This is a long time to wait, especially if your heirs have expenses to pay of yours and are limited on cash. Many people like to leave a large sum of cash behind, which is a truly wonderful thing to do. However, in order to avoid a long, drawn out process, take out a large life insurance policy. Life insurance pays within 14 days for the most part, and is tax free to your heirs as well. Most companies offer a plan where is you put a large amount of money in, say $50,000, they will give your heirs upon your death a larger portion back, so $75,000. This is truly wonderful because it will grow faster than any savings account will and it is available immediately to your loved ones. This is truly the best way to pass money on to the people you love and want to protect.
The last part of planning is doing something to help others out that most do not think of. Did you know that you can purchase a life insurance policy and make it payable to your favorite charity or church upon your death? This is a wonderful gift that can be remembered forever, and many people like to take this method. Again, a great way is to take a small amount of money that you would like to donate and buy a policy that will give you a larger payout in the end. This is a great way to keep your favorite programs running and keep your legacy remembered as well.
Also, don’t forget about purchasing insurance for your loved ones as well. Some might not be in the financial position to afford a policy right now, but when they are younger, it is the best time to buy due to costs and eligibility issues. Buying insurance for your grandchildren is a very popular gift to be given at their birth. Insurance will never be cheaper than when someone is first born, and giving them a life-long gift will always be remembered as well.
As you buy your grandchildren any life insurance that you find suitable for them, you get a cheap life cover. It is a really smart decision to buy someone life insure at a young age.
Planning for your future is tough and can be scary. It is a big responsibility to undertake, as most do not want to leave their loved ones with any burden. The best way to go about this is to talk to your current insurance agent about your plan and get their suggestion on where to make changes. If you do not have an insurance agent, talk to friends who might know someone who is well known and respected in the community. It is best to talk to someone you will trust. If you do not trust the insurance salesperson, do not buy from the, as you have other choices. Ask if they have any credentials like a LUTCF or CLU certification. Any type of certification will show they are committed to their careers and continuing education. These certifications are not easy to come by, and often take years to complete. If someone is in the process of getting it, they can be trusted as well as they are working towards it and should not be looked down upon whatsoever.
This is a good start on how to get a good insurance plan into place. Always make sure you get promises in writing and read everything. Unfortunately, there are too many companies now that just want to make a quick dollar, and really do not care about their clients. Good luck in your endeavor, and make sure you plan well.
