Preparing for the Worst: Protecting your Financial Future
While the possibility of the death of a spouse is a reality none of us wish to think of, it is one for which all couples should prepare. If one spouse has stayed at home to raise children, or if there are children in the home, preparedness is especially important. While many employers do offer life insurance protection, the amount is often inadequate. Social security benefits apply to many individuals, however they are completely inadequate.
How much life insurance is adequate? Ideally, the life insurance death benefit should be enough to cover at least all of your personal and joint debt obligations, including vehicles and the home mortgage (if you do no have private mortgage insurance already). Moreover, your life insurance death benefit should also be sufficient to maintain the family’s standard of living. . This should provide enough income to cover all of the family’s regular living expenses, your funeral expenses, and also be enough to supplement your spouse’s income for at least one year especially should they take time away from work. It is also important, depending upon your medical coverage, to allow for any final medical expenses associated with your health care prior to death. Deciding on how much of a death benefit you need provides the opportunity to look at your own financial health to determine whether or not you are tending to those issues appropriately now. It would certainly be better, in the event of tragedy, to leave your family in a comfortable and secure financial position. While some families may be left with a financial crisis because of poor planning, most people can agree that no one ever complained about having too much life insurance coverage, particularly in a time of loss and crisis.
Everyone needs life insurance but the question is when should you purchase life insurance? Ideally, anyone with children should have at least term life insurance to protect their children’s financial futures in their developmental years. Even if you do not have children life insurance will ease your spouse’s financial strain during their loss and help meet any final expenses, as well as allowing the surviving spouse to remain in the home and maintain his or her lifestyle. While it is easy to consider life insurance for the family breadwinner, it is very important to consider life insurance coverage for a stay at home parent. If they were to pass on, the cost of child-care alone could present a significant financial burden. Even if you are single with no children you should have enough coverage to pay off any debts (including home and vehicle loans), cover medical expenses, and pay funeral costs. Fortunately, young healthy adults typically can acquire adequate life insurance coverage at a very reasonable cost.
Life insurance planning is just one aspect of responsibly managing your finances, especially your current debt and living expenses in the event of tragedy. Managing debt wisely in life and carefully planning in advance will ease stress and struggle in the event of loss. If your debt is out of proportion with your income (you have a high debt-to-income ratio), and you cannot afford life insurance coverage, it may be time to consider seeking help with your financial worries. If your debt burden is so high as to make it difficult to afford an appropriate policy, this too can be a sign of impending credit problems. If considering your future and the possibility of loss in your family has brought to light current financial difficulties, consider contacting Provanta Corp and getting the assistance you need to put your affairs in order. Preserving your ability to procure credit in the future and improving your financial health can aid the surviving spouse in the event tragedy should come upon your family.