When you die, the debts you held in life can burden those left behind.
But with the help of your insurance agent, you can create a plan to make sure that your legacy is debt-free.
September is Life Insurance Awareness Month. While about six in 10 Americans say they own life insurance, nearly half of them might have insufficient coverage to address the financial needs of their family when they die, according to a Bankrate Money Pulse survey.
“When we pass away, we’d most likely leave our debts to those that we love the most,” says Chris Rogers, senior insurance agent at Dupaco Insurance Services. “Imagine now trying to pay off those debts minus the named insured’s income. Life insurance isn’t about making anyone rich. It is about the beneficiaries being able to continue to live their existing lifestyle with as little disruption as possible.”
Choosing the Right Life Insurance Policy is a Balancing Act
Determining the amount and type of life insurance that’s right for you comes down to balancing the death benefit versus the premium. After all, the life insurance does you no good if you can’t afford the premiums, Rogers says.
Start by completing a life needs analysis, provided by your agent, based on a perfect-world scenario—without worrying about the premium.
The analysis encourages you to write down what is most important to you to solve your life insurance needs, including everything from final expenses to college funds for children to mortgage balances and other debts. Don’t forget to prioritize your needs.
Life Insurance isn’t one-size-fits-all
“By having them complete the analysis, the amount of life insurance is based on their needs, not a magical $100,000 figure that works for everyone,” Rogers says. “They are usually shocked to see how much need they really have.”
With this information, your insurance agent can craft a policy that best meets both your needs and your budget.
“Talk with us. Every case is a unique case. Each member has their own thoughts, dreams and needs,” Rogers says. “Our job is to protect those.”
Start Tackling Your Debt
Completing a life needs analysis also provides an opportune time to review your debt. If you find that you carry more debt than you realized or are comfortable with, seize the opportunity to confront it.
At Dupaco, you can schedule a free Money Makeover to review your entire financial picture, including your debt. You might be a candidate for a debt consolidation loan, which could potentially lower your interest rate and your payments.
Paying down your debt can bring peace of mind for you today and for your loved ones tomorrow.