A loved one dying is never an easy time. Along with grieving, the bereaved need to form a new way of living day-to-day emotionally. But, for those who lose a loved one they relied on financially, these losses can be even more worrisome. Life insurance is a tool that helps minimize that financial burden. It can safeguard your family's financial health in one of their worst times.
How Life Insurance Works To Reduce Financial Loss
If you are a wage earner, your family may benefit from a life insurance policy. The policy pays the people listed on it a death benefit if you die while it is in place. This lump sum of money goes directly to the person named on the plan as a beneficiary. It does not go through probate or face taxation. This means your family gets the funds right away.
Here are some key benefits of a life insurance policy:
- Unlike your other savings accounts and investments, life insurance does not face probate. Probate can tie up financials for a deceased person for up to a year. By contrast life insurance makes sure your family has funds immediately.
- Policies often provide funds within weeks. As soon as the county issues a death certificate, your loved ones can claim the funds. They can use the funds for anything they need.
- Your loved ones do not have any rules on how they use the funds. For instance, they can use them to pay their day-to-day expenses. The key here is they do not necessarily have to use them to pay your debts. However, this is what many survivors choose to do with the money.
- The policy allows you to choose who the funds go to. There are no rules here. As long as you list the person on the policy, they receive the funds. You can, however, take further legal steps, such as creating trusts, to ensure the security of the funds.
- You can select smaller policies to cover your funeral and end-of-life costs. This is a very inexpensive way to relieve your family of this financial burden.
If you have a savings or funds put aside, you do not want your loved ones to deplete them after your death. Instead, allow them to have the financial support they need from you. Life insurance can help you achieve this task. It can be affordable and accessible. It can be an excellent investment strategy. Talk to your Affordable Insurance Group agent about which plans might best meet your needs.