It’s National Financial Literacy Month. The goal is for financial institutions and organizations to educate Americans on some important but often overlooked financial issues. Often, the key to a successful financial future is in minimizing risks and threats. One of the most dangerous financial threats any family faces is the unexpected death of a parent.
Despite the threat posed by death, studies show that many households have little or no life insurance protection. A 2015 study from Bankrate found that only 60 percent of Americans had life insurance, and half of those had less coverage than they needed. Among families with children, 37 percent had no life insurance protection, while 32 percent had less than $100,000 in coverage.1
There are a variety of reasons people have for not carrying sufficient coverage. Some people may feel that their death is unlikely, so insurance protection is unnecessary. Others may underestimate just how much money their dependents would need. Some may believe life insurance is too expensive for them to afford.
If you’re not sure whether you have enough coverage, you may want to review your needs. Below are a few common protection goals that can be achieved with life insurance. If you haven’t taken steps to protect your family, now may be the time to do so.
No one wants to think about their own death and funeral. However, your death is inevitable, and your family will have to pay for your coffin, burial site, funeral, and any other services they choose. Even a modest funeral and burial can cost thousands of dollars. Without life insurance, your family may be forced to pay this cost during a sensitive and emotionally fragile time. Life insurance can be an effective tool to cover these costs.
Does your family depend on your income? How would they support themselves and maintain their standard of living if your paycheck disappeared. Life insurance is often used as an income-replacement tool. You can provide your dependents with a lump sum, and they can then use those funds to generate income in the future.
You may not earn income and contribute to the household’s earnings, but you probably contribute in other ways. For example, you might stay home and raise the kids while your spouse works. How would your family cover that childcare if you were to pass away?
Think about what challenges your spouse may face without your contributions. He or she may have to hire a nanny or send your children to day care, either of which would come with high costs. He or she may need to hire a housekeeper or may spend significantly more on lawn care or dining out. Again, life insurance can be used to help cover these costs.
You may have other goals for your family after you pass away. A common goal is to fund educational expenses for children. Or perhaps you’d like to leave money in a trust that your children could access as adults. All of these goals and more can be accomplished with life insurance.
Do you have sufficient life insurance coverage for your family’s goals and challenges? If not, let’s talk about it. Contact us at Fenton Financial Services. We can help you analyze your needs and develop a protection plan. Let’s connect soon and start the conversation.
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.
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