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Why Life Insurance Matters Even More Right Now
Life insurance has always been an important purchase for people to make. The death benefit your beneficiaries receive when a life insurance policy pays out can be used to pay off debt, keep your family in the home you worked so hard to create for them and help ease the financial burden caused by the loss of a family wage earner.
But now, while college savings and retirement accounts struggle to get back up to pre economic downturn values, life insurance can provide an even more valuable benefit than usual--it can help supplement the loss of value experienced in these vital savings accounts.
You see, when your retirement and college savings account started dwindling, you and your spouse most likely started increasing your contributions. Naturally you hoped for a market rally to help your investments climb back up to the value they had a few years ago but because there are no guarantees in life, you probably counted more on your increased contributions adding up than the market rebounding. Now, if you or your spouse were to pass away, not only would the surviving spouse lose the deceased spouse’s financial contribution to these accounts but he or she would also lose much of their own as they are forced to use more and more funds toward sustaining your family's way of life. This could seriously impact your children’s ability to go to the college they dream of and your spouse’s ability to retire comfortably.
Your life insurance death benefit proceeds can be put to good use as contributions to 529 plans, ROTH IRAs, and annuities* that will pay out the proceeds when it is needed most--when your kids go to school or your spouse retires.
But some people feel as though a life insurance premium is the last bill they can afford to add to their budget right now. No matter what your financial situation, now is not the time to attempt to go without life insurance coverage. Budgets and belts may be tight for months and years to come, but they only get tighter when there is no life insurance death benefit to help ease the financial burden of the death of a spouse or parent. Life insurance helps to keep your family secure, their income predictable and their lives simple.
*Death benefit proceeds can be used as contributions to 529 plans, ROTH IRAs, and annuities when permissible and within all limits.
But now, while college savings and retirement accounts struggle to get back up to pre economic downturn values, life insurance can provide an even more valuable benefit than usual--it can help supplement the loss of value experienced in these vital savings accounts.
You see, when your retirement and college savings account started dwindling, you and your spouse most likely started increasing your contributions. Naturally you hoped for a market rally to help your investments climb back up to the value they had a few years ago but because there are no guarantees in life, you probably counted more on your increased contributions adding up than the market rebounding. Now, if you or your spouse were to pass away, not only would the surviving spouse lose the deceased spouse’s financial contribution to these accounts but he or she would also lose much of their own as they are forced to use more and more funds toward sustaining your family's way of life. This could seriously impact your children’s ability to go to the college they dream of and your spouse’s ability to retire comfortably.
Your life insurance death benefit proceeds can be put to good use as contributions to 529 plans, ROTH IRAs, and annuities* that will pay out the proceeds when it is needed most--when your kids go to school or your spouse retires.
But some people feel as though a life insurance premium is the last bill they can afford to add to their budget right now. No matter what your financial situation, now is not the time to attempt to go without life insurance coverage. Budgets and belts may be tight for months and years to come, but they only get tighter when there is no life insurance death benefit to help ease the financial burden of the death of a spouse or parent. Life insurance helps to keep your family secure, their income predictable and their lives simple.
*Death benefit proceeds can be used as contributions to 529 plans, ROTH IRAs, and annuities when permissible and within all limits.
Tags: budget, insurance, life, management, money
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