No one likes to talk about the possibility of death. Yet, it is something that will happen to everyone. As parents get older, it becomes more important than ever for them to have a frank conversation with their children about the financial components of death and dying. You may have had a talk about final wishes and specific goals for end of life decisions. Yet, many people fail to talk about life insurance.
Do You Have Life Insurance?
A good place to start is with a conversation about what type of life insurance you have, if you have any. If you are younger or older and still healthy, it does not have to be expensive to purchase life insurance, even now. If you do have a policy, discuss the details of it with your family, including which company holds the policy and the type of coverage (term, whole life, universal etc.).
What Does Life Insurance Provide?
You may have very specific desires for your life insurance policy. Now is the time to talk to your loved ones about it. Life insurance policies are written so that a death benefit, or payment, is paid to the person or people you list as your beneficiaries. These individuals do not wait for escrow to close, but rather receive the funds right away. They can then use them as they see fit. This may mean using the funds to pay for their needs or to cover your final expenses.
It is essential to discuss how much of a policy they can expect, who the beneficiaries are and what your wishes are. Ultimately, they will be the ones to make key decisions about these funds. If you have a long-term policy in place, you may want to ensure your loved ones also know about any additional estate planning wishes you have and plans that you have made.
No one wants to discuss the need for, the use of or the existence of a life insurance policy for their loved ones. Yet, you know how valuable this type of policy can be when it comes to caring for your loved ones if you are not there to do so. Be open and honest with your loved ones about your policies.