Life Insurance and Wills: Personal Finance Advice

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Do you have life insurance? If you’re single, or you don’t have any kids, or you don’t work, there is a good chance that you have talked yourself out of needing life insurance because you figure that nobody will find themselves in financial trouble if you die. Most people should have life insurance, regardless of their marital status or financial standing. It may seem like an unnecessary expense to you – after all, why should you care what happens to your finances after you’ve passed away as long as you’ve already specified who will inherit the vintage Chanel you found at a garage sale – but life insurance can be relatively inexpensive depending on what type you purchase.

Consider what happens to your finances when you die. Before your assets can be divvied out to people your debts have to be paid. This means that your estate is responsible for any debts you incurred while you were still living. Debt doesn’t magically disappear when you die, contrary to popular belief.

If you have a life insurance policy it should cover the cost of your debt and maybe even give a nice chunk of change to someone who is going to miss you. For example, if you aren’t married and don’t have any children you might put a sibling or parent as your life insurance beneficiary. They will then be responsible for using the life insurance money to settle your debts and then use the rest to do with as they please. Remember that funerals and burials cost money, and unless you make previous arrangements for these things you’re putting the financial burden on someone else.

Imagine a situation where you don’t have life insurance and you pass away, leaving massive piles of debt that your parents happened to co-sign for. Not only do your parents then have to deal with the untimely death of a loved one, but they also become solely responsible for the debt. That’s bad. Consider buying a term life insurance policy because this won’t cost you much in monthly premiums as opposed to any other type of policy. You don’t have to buy a lot of insurance…just buy enough to cover all the debt you’ll leave behind as well as to take care of anyone you’ll leave behind who is financially dependent upon you now.

Ask an insurance advisor about what specific policy is best for you. Don’t buy more than you need, but don’t scrimp on this particular expense. After all, you want people to remember you for your fierce fashion sense, and not for all the debt you stuck co-signers with.