What is something everyone needs but most people think they cannot afford?
What is the best way to show your immediate family how much you love and care and for them?
How do you ensure your immediate family will not endure financial hardship?
The answer to all of these questions is this:
You get life insurance.
Stay with me – this is important. Please don’t ignore this message –
The greatest gift you can give to your family is to make sure you have adequate life insurance. Life insurance is one of the insurances people often tell me they cannot afford. However, it is the best way to show your family how much you love and care for them and it ensures that your family will not suffer financially when you pass away. It is your
responsibility to get life insurance. GoFundMe is not a life insurance plan. Click To Tweet It’s not fair to rely on friends and family to give you money because you did not have life insurance. Think about this – generally speaking, our circle of friends and our family have the same financial situation as we do. If someone had to create a GoFundMe page to raise money for your funeral expenses, how much do you really think you would raise? Would you get $10-15,000 in a short amount of time? I hope
Think about this – generally speaking, our circle of friends and our family have the same financial situation as we do. If someone had to create a GoFundMe page to raise money for your funeral expenses, how much do you really think you would raise? Would you get $10-15,000 in a short amount of time? I hope so because that’s how much money you need just to cover a basic funeral service. (By basic, I mean a service in the chapel of the funeral home and cremation)
Life insurance money covers funeral expenses.
When my husband and I went through Financial Peace University (FPU), we were shocked that we did not have enough life insurance coverage We had only the basic, bare minimum because every year that’s all we “could afford”. One I learned about insurance, I was terrified that we did not have enough. If my husband had died, I would have lost our home. At the time we took FPU, I was a stay at home mom which meant the only income we had was his paycheck. When he dies, his paycheck ceases to exist. I would have had to deal with the loss of my husband, raising two boys without their dad AND the financial stress that comes from losing the sole source of our income.
If I had died with our minimum coverage life insurance, my husband would be in a bind financially because he would have to hire childcare for our boys. At the time, it was not in our budget to hire childcare – remember that when we started FPU, we were living paycheck to paycheck, had no money in savings and had over $43,000 of consumer debt. There was NO money in the budget to add childcare for our boys because I passed away and my husband still needed to work.
So, what did we do?
We met with a life insurance agent and figured out how much money we needed for two main things:
Loss of income until our youngest son is 18 years old.
Dave Ramsey, in FPU, recommends 10x your current income for life insurance. Stay at home moms need life insurance too – how much that it depends on the needs of the family. In my case, I needed enough life insurance for funeral arrangements AND to hire a nanny/household manager at least five years. For my husband, we had to make sure his life insurance was enough to cover his funeral arrangements and loss of his income.
Life insurance money covers loss of income.
Here’s a basic example:
A couple brings in $50,000 a year. ($25,000 each)
One spouse dies = loss of income.
The other spouse MUST continue to work in the current capacity to bring income in. The best scenario is that they would get paid leave or have vacation time so while they are taking time off to grieve, they are still getting paid. But, what if that’s not the case?
Most people who bring in $50,000 a year live on a budget that is $50,000 a year. Most people do not live on half of their income.
If you live on $50,000 and you lose half of that, how would you need to adjust your budget? Think about it. What happens to your household financial plan if you lose half of your income?
If you have enough life insurance, this isn’t an issue. You would have the income from the insurance to cover expenses.
In my four years of financial coaching, I’ve sat across from the person who lost their spouse and they did not have enough life insurance. I’m going to tell you from personal experience that this is a hard situation to deal with. It’s not fair that your spouse would have to deal with you being gone AND the stress of not having enough money.
It’s hard to hear a widow in near tears ask me,
“How am I going to make sure I don’t lose our home?”
It’s hard to hear a widower ask me,
“How am I going to go back to work full time and take care of the kids?”
You know what? It’s not fair, either. It’s not fair that you don’t have life insurance and you leave your family with a financial burden to deal with. It’s too much for most people – dealing with the loss and the financial burden.
The greatest gift you can give your family this Holiday Season is the gift of financial peace. The gift of knowing that when you die, they will be ok financially.
Stop thinking you can’t afford it and find a way to make it happen. Talk to a life insurance agent ( I know plenty I can refer to you if you need a referral) and at a minimum, get enough to cover funeral expenses. Then, increase your coverage as you can – but do it sooner than later.
You family will thank you. You will feel better.
Taking care of your family is the greatest gift.