Putting a solid estate plan in place is an important part of making sure that your loved ones won’t find themselves facing unnecessary financial hardship if something happens to you. The process of estate planning can vary greatly, depending on individuals’ net worth, business holdings, and a variety of other factors. Life insurance is an integral component of any comprehensive estate plan, no matter what other factors need to be taken into consideration.
Even if your net worth is sizeable, your loved ones might not be able to access the assets quickly enough to take care of immediate financial needs. That’s why proper planning using life insurance can be so beneficial. If your estate plan doesn’t include life insurance, your family could face the difficult situation of not being able to manage the expenses of daily living, let alone cover the costs of your funeral.
When your estate plan includes sufficient life insurance coverage, your loved ones won’t have to worry about how they’ll find the money to make ends meet in the event you are no longer around. Proceeds from life insurance are paid directly to the named beneficiaries, so that individual (or those individuals) won’t have to wait out potentially lengthy and complicated probate proceedings to access the funds.
Proceeds from life insurance policies have saved many families from financial ruin. Even if you have a good bit of money saved to pass along to your heirs, account access can be tied up in probate for months. Funeral expenses, mortgage payments, car notes, and other expenses won’t go on hold while your estate is being probated. If you want to make sure that your loved ones won’t have to struggle with coming up with the means to pay these expenses, it’s essential to make sure that your estate planning efforts include a sufficient amount of life insurance.
When you seek professional advice about retirement and estate planning, insurance will certainly be one of the first topics of discussion. Whether you’re speaking with a financial advisor or an estate planning attorney, it’s quite likely that he or she will encourage you to set up a survivorship or second-to-die life insurance policy. The type of policy that is best for you will, of course, vary based on your personal, family, and financial situation and your estate planning goals.
Life insurance is widely recognized as one of the most important parts of any sound estate planning strategy. When you take out a life insurance policy, you’re taking an important step toward making sure that your family members, or other beneficiaries, will have access to money if you are no longer with them. The life insurance premium you pay to maintain coverage is an investment in the future financial security of the people you care about most in the world.
While most people recognize the importance of proper planning, it’s very common for individuals to put off making estate planning decisions until they think they’re old enough to need to make provisions for the future. Before you decide that it’s not time to worry about retirement and creating an estate plan just yet, stop and think about these three reasons that it’s important to start the estate planning process today: