Some time ago, I had a nice chat with a friend who decided, at long last, to get into estate planning. (Hooray!) It got me so excited for her (and for us working together!), of course I just had to know what pushed her to finally get a plan–life insurance in particular.
She says she was finally doing it to “to set aside enough resources to answer for funeral and burial expenses.”
We had such an insightful talk afterwards–so much so that I’m sharing some of it with you on today’s blog! (Not putting this teaching moment to waste!)
Life insurance is for burial costs.
Okay, so just to be clear: To say that life insurance helps with burial expenses is not 100% wrong. In fact, there are life insurance plans that do exactly that: cover a person’s funeral and burial costs when they pass (called “final expense insurance,” or “funeral/burial insurance” if we want to be straightforward).
What we must bear in mind, though, is that life insurance does so much more than help pay for final expenses… It isn’t just for that. (we’ll go into this in detail later!)
Truly, one of the recognized advantages of life insurance is that loved ones left behind won’t have to struggle to pay for funeral and burial bills. As life insurance policies disburse payouts (sometimes even in lump sum–that is, a one-time large payment of the coverage amount!) to the family upon death, this ready money is the perfect source of funds for such an urgent (and oftentimes, unexpected) situation.
This is precisely why life insurance is often thought of as an act of love. You give your family one less thing to worry about (a major one at that!), thereby reducing the pain and stress they will have to go through when the time comes, and allowing them to go through the whole mourning process without having to fret about expenditures.
It ISN’T JUST for burial costs.
Now here’s where the illumination is called for–life insurance isn’t just for funeral and burial costs. Its use and value go above and beyond this one-time expense!
Essentially, life insurance is all about financial stability in the absence of the policyholder… financial stability even after the funeral rites and all. In particular, life insurance allows loved ones to realize other great (or greater, even!) benefits, like funds for:
Your children’s education
Paying off mortgage and other loans
Income replacement for loss of earning capacity
I guess what I’m trying to say is that life insurance isn’t just for the short-term rewards. Sure, it’s especially helpful in emergency situations like the passing on of the policyholder, but it can most certainly work to benefit your loved ones and even later generations.
Your life insurance policy is in it for the long haul.
You read that right–life insurance can serve future generations, from your children, to your children’s children, and beyond. What’s amazing about life insurance is that it can be a powerful tool to ensure that your family gets to feel its effects many, many years after its execution.
Because why settle for short-sighted planning when you’re allowed to do otherwise, right? Estate planning for long-term goals. YES to that!
Some call it multigenerational estate planning, others legacy planning or generational wealth planning. However you want to refer to it as, one thing is for sure: Life insurance, and other estate planning tools for that matter, can let you pass on financial security not just to one, but to many, many generations more.
Want to set aside college funds for your family’s future generations? Looking to build and maintain generational wealth? Wish to grow it for the benefit of your descendants and theirs?
Life insurance is an excellent tool for this!
Now I don’t want to bombard you with the how-to’s (we can save that for when we have our one-on-one chat! *wink*), but in essence, life insurance payouts (the surplus, at least) can be earmarked to acquire new estate planning tools, thereby passing on the rewards to the following generations.
Smart, forward-thinking planning. That’s what it is! ;)
And that is basically it on the matter! This is just a surface-level discussion... or could be a little overwhelming for some? Either way, I am open to talk about this some more with you!
Until then, talk to you guys again on the next one!