Trying to choose life insurance can be overwhelming. No matter how morose the topic can feel, it is a financial planning strategy that needs to be addressed. Having life insurance can make sure you have a rad funeral or ease the burden of loss on your loved ones, because they won’t be left in an economic lurch by any debt you’ve left behind.
Beneficiary
It’s important to decide who you want to name as the person who will receive the money once you’re gone. Don’t assume this entire sum would go to your next of kin if no one is named. Laws vary from state to state, so it’s best to choose a person and then write the name of your beneficiary on the policy. This person should be responsible enough to delegate the funds to pay for your debts and funeral expenses, as per your final wishes.
Pay Out
When determining what type of life insurance will best fit your needs, it’s important to calculate what you’ll need it to pay for. Some import things to consider are if you’re wanting to pay for a loved one’s lifestyle with the money after you’ve departed, or if you’re just hoping the plan will cover the cost of your final expenses. You don’t need to make monthly premium payments on a whole life million-dollar policy if you only need enough money to pay for a funeral. It’s also important to figure out what kind of monthly payment your budget will allow for.
Types
There are two main types of life insurance, term, and whole life. Term is relatively inexpensive compared to whole life, but it expires after a set number of years, and all of the money you paid in is gone. These types of plans can be attractive because you get larger pay outs for paying premiums of only $20-$30 a month. You can also purchase multiple smaller plans with $10,000-$25,000 pay outs and skip the invasive health screenings and nosy questions that may come with other policies. Whole life costs more, but it doesn’t expire based on your age or the age of the policy. These policies are expensive, but they are also an investment. The money you put into a whole life policy gains in value over time. You can read more about the differences here.
Shopping for life insurance doesn’t have to be morbid. It’s a necessary financial planning step that shouldn’t be overlooked. How else will you ensure you get the bereavement fire dancers and 24 Karat gold casket funeral arrangements you’ve always dreamed of?