This month I met with a client who had made provisions for his children. Upon my advice we then made contingencies for his grandchildren but not his children-in-law. When one of his kids learned that it understandably left him concerned about his wife if something happened to him. My solution: life insurance.
Life insurance is a regular topic I discuss with my clients for many reasons, but recently it has come up in some very important ways. The first being one of the most obvious and important to me. That is when it is meant to provide for a family after a loved one passes. Nothing can make up to losing a husband or father, but at times something is necessary to make up for the finances they contributed. Especially if whomever is left behind cannot solely take on all of the responsibilities left for the family. Whether breadwinner, caregiver, or both.
For families with some debt it is also an important way to leave assets hassle free. If someone is going to inherit a house or business, debt may be a realistic part of that property. But it also might be a complication to have to refinance a mortgage or try to obtain business financing. For beneficiaries with poor credit it might be extremely expensive or just impossible. Using life insurance to pay these debts can make your gifts much more of a gift and much less of a burden.
For business owners it can also be a way to ensure the business can be transferred to another for the fair value of the business.
Life insurance is also one of the best ways to make the family left behind doesn’t have to pay for a funeral out of their pocket.
There is also the obvious use of life insurance to guarantee a certain amount of money is left as an inheritance. This is extremely important for my clients with blended families. Life insurance is a great way to guarantee a prior born child or a new spouse will not be disinherited.
No matter the reason, life insurance is an extremely important consideration of any estate plan. I would strongly recommend talking to a licensed insurance agent about all of the different products and what would fit your goals the best.