Life insurance is a policy that pays a predetermined sum of money to the policyholder’s beneficiaries if the policyholder dies unexpectedly. This money can come in handy in clearing debts, paying estate taxes, covering funeral expenses, and even paying for the beneficiaries’ education and healthcare.
Here are five instances where life insurance can provide for you and your loved ones:
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You Have an Unpaid Private Student Loan
The U.S. government typically discharges federal student loans in case the borrower dies. Unfortunately, when it comes to private student loans, discharge occurs on a case-by-case basis. This means there’s no guarantee of discharge, and hence, the lender will likely transfer the loan burden to your cosigner. Whether the cosigner is your parent or not, the loan burden will harm their finances, especially if they’re not financially stable. Provided you have an outstanding private student loan, it is prudent to get life insurance to clear the balance if you die prematurely.
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You Have Dependents
If you are your family’s breadwinner, you will likely leave them in financial turmoil if you die. For instance, if you have college-going dependents, they will likely drop out due to a lack of finances. In fact, this is the main reason why students in the U.S. drop out of college. With other financial needs such as healthcare, food, childcare, and entertainment at hand, your dependents will be in a financial crisis. However, if you get life insurance, this policy will cater to their financial needs up to the stipulated limits.
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You Have an Outstanding Business Loan
Similar to a private student loan, a business loan will become your cosigner’s burden in the event of your death. The good news is that you can prevent this by purchasing life insurance coverage. In such a case, you will list the lender as the beneficiary of the insurance policy, meaning, upon your death, they will receive the death benefits and use them to repay your outstanding loan.
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Your Family Can’t Afford Funeral Expenses
Since 2016, the cost of burial and cremation of an adult in the U.S. has increased by 6.6% and 11.3%, respectively. Funerals are expensive in the U.S., so your death may cripple your family’s finances, particularly if you didn’t leave any financial plan behind. Therefore, make sure to shield them using life insurance if you feel your family may not be able to afford your funeral expenses.
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You Have a Large Estate
If you have an estate that exceeds $12.06 million in value, the federal government will charge estate taxes from your heirs. It would be best if you got life insurance coverage to relieve them of the financial burden. This policy will cover the taxes and repay any estate debts that may have accrued while you were still alive.
Reach out to us at Donald Weiss Insurance Services for a life insurance policy that suits your needs and budget. Contact us today to get started on your personalized coverage.
