Mother’s Day and Memorial Day both happen in May, and as we spend time with loved ones and remember those who’ve gone before us, it’s important to also consider our future legacy. The last thing you want to leave behind for your family is financial hardship.
We’ve put these quick tips together to remind you about some of the insurance and estate pitfalls we’ve seen–and can help you avoid!
Planning ahead and planning well for your family is one of the most loving things you can do.
- Make sure you have the right amount of coverage
So how much life insurance should you have? If you have no dependents, no debt, and have enough assets to cover final expenses, you don’t need life insurance at all. Everyone else should consider the financial realities your loved ones would face without you. A good insurance agent will help you obtain just the right amount of life coverage—not too much, and not too little. They will factor in any debt you hold, including your remaining mortgage, credit cards and car loans. They’ll help you decide if your family will need your income covered—and for how long. And they’ll also discuss any future plans you have, like paying for college or future medical needs.
- Designate—and update—beneficiaries
Make sure that your insurance policy beneficiaries are designated. Otherwise, your policy proceeds will land in probate court instead of bypassing probate and going directly into the hands of your loved ones, tax-free. And through the years while your policy is in force, remember, things change. Your kids grow up, they have babies, sometimes there are divorces or a family member passes away. It’s a good idea to review your policies once a year to make sure your beneficiaries are still the people you want to receive money from your estate.
- Choose the right type of policy
Maybe you only need a term policy which ends when you reach a certain age. But consider this, the face of insurance has completely changed since the recession of 2008. There are now policies that can provide permanent life insurance plus an investment component which accumulates tax-free. There are insurance policies available that even offer nursing home or long-term care coverage, or lifetime income throughout retirement. It’s a good idea to find out about all the new developments out there as insurance companies continue to innovate.