When someone dies, families are often navigating both emotional grief and unexpected financial responsibilities at the same time. Planning ahead can help ease the burden of:
• Funeral and memorial expenses
• Burial or cremation costs
• Medical bills or legal paperwork
• Loss of household income
• Travel and family accommodations
• Time away from work while grieving
I’ve heard from so many families after a sudden or unexpected loss that they just didn’t think about life insurance or thought it was too expensive to include in their monthly budget. As someone who lost their father unexpectedly, not planning ahead of time can cause the family extra stress in a time that is already overwhelming.
Exploring and planning for the “what ifs” is an emotional rollercoaster. While its not something anyone wants to discuss, doing so can save your family from having to make those decisions during a time of deep grief.
Here are some common misconceptions about life insurance you’ve probably thought of when navigating planning for your future.
“I’m too young to need it.”
Life insurance is often more affordable when purchased earlier in life. If you buy yourself your favorite coffee drinks every week, you can afford this insurance.
“My family can just fundraise if something happens.”
While communities often want to help, financial protection offers stability without added pressure during grief. How often are we seeing GoFundMe fundraisers? It doesn’t have to be this way.
“Funerals don’t cost that much.”
Funeral, burial, cremation, travel, flowers, memorial gatherings, and time away from work can add up quickly. (Think in the 10k and upwards range as a baseline.)
“I have savings, so I don’t need insurance.”
Savings can disappear quickly when covering end-of-life expenses and daily living costs. Accounts after a death are frozen and require a process in order to gain access to them.
“It’s too complicated to understand.”
Learning the basics can help families make informed, manageable decisions for the future. Investing in this is the ultimate gift for your family. Although this is not a fun converstion, its one that is easier to have when the family is not it “crisis mode.”
“My retirement account can be used for the final expenses and life adjustments.”
There are a lot of risks and unknowns with using your retirement account such as lack of liquidity and taxes that are left to your loved ones with retirement accounts.
Life insurance is tax free, has immediate liquidity and has zero risk.
Give yourself peace of mind, and your loved ones the financial security they deserve by organizing your assets, accounts, & important contacts all in one place with a Lifefolio. Start by scheduling a consultation with a Life Insurance Agent you trust. They are not all out for your best interests, so get referrals, ask friends and family for their personal experience with their agent.
Don’t be afraid to ask questions before signing anything!
How does an inherited 401k impact your taxable income?
If a beneficiary is a Trust, does the trust have a bank account set up?
What if there are bills that need to be paid while planning a celebration of life for a loved one, what's the best asset to draw from first?
What's liquid?
What has income tax & penalties?
When did I last update my beneficiaries?
The financial decisions we make today affect us tomorrow & into the next generation, so if providing a legacy to kids, grandkids, or even a charity, religious organization, or an alma mater is important, you should understand the impact of leaving behind a life insurance policy, retirement accounts, stocks, and real estate.