In a world that faces the risk of uncertainty with every passing day, it only seems viable to have some security for yourself in the future, especially when it comes to healthcare planning.

Often, as working professionals, people know that getting life insurance would be an appropriate thing to do, but they tend to not delve deep into why it would be almost necessary for them. The reason why life insurance is important is that it serves as a protective shield for your family and loved ones once they’re left to deal with the grief, and crippling financial burden posts their loved one’s death.

If you’ve never considered getting life insurance, you’re not the only person. Most of the middle-income group people tend not to give it thought, always thinking of life insurance payments as an added burden, even though there are several low-cost life insurance plans available that you can get to protect your family..

Here’s how getting life insurance protects your family:

1. Protect Your Loved Ones

Generally, the risk of losing a life tends to heighten among people when they start a family. People who don’t have families have no one relying on their incomes and added responsibilities, which is why it’s easier for them to avoid getting insurance earlier on in their lives, which, if done so, saves you a lot of money. In the first place, young people are more reckless and don’t plan their finances smartly, which is why they never think about insurance, let alone life insurance.

In most cases, however, when you have people depending on you, and you’re the primary provider, you need to consider how to get life insurance to safeguard their future interests.

As life is quite unpredictable, there are several things that can go wrong. So, you need to prepare yourself and your loved ones in an instant something happens to you.

2. Future Financial Reserve

Families can choose one where their family, and especially the children, can benefit in the future by using it as a financial reserve in their adulthood. Insurance schemes tend to provide options where you can let them put your cash into investment schemes, which can serve as a very safe and viable option for you to save for the future needs of your family.

Paying for your child’s college or even marriage can be a hefty expense. That’s why having it being taken care of by the life insurance scheme that you’ve chosen is a relief for the guardians.

A single program can often take care of your needs without you having to opt for another one. Insurance companies often provide you ways in which you can modify the dynamics of your life insurance plans as well, which gives you a leeway to alter things in times if an immediate cash need arises.

These kinds of facilities, if read up on, are often helpful for people when they’re deciding whether to buy life insurance. Life insurance is often associated with money being tied up for the long term, but that doesn’t have to be the case if you have chosen a plan that suits your future financial needs.

3. Loss of Future Income

In the new world that is still working on getting its way out of a pandemic, it’s easy for us to acknowledge that life-threatening disease, as severe as the one mentioned, is very likely to hit us out of nowhere. With recession looming over our heads in the coming future, one must do everything to shield their families.

The unemployment tolls are high during economically testing times. For families that have elderly or children that are undergoing treatments for critical diseases, it’s very likely for them to suffer the most in such situations – especially when a closed one has also passed away due to unforeseen circumstances. A healthy person rarely thinks that they may die, which is why getting life insurance is a safety measure to opt for.

Often, health plans are tied to the jobs that we are working on. A loss of a job usually results in losing the healthcare benefits as well, increasing the financial strain on the families. What this situation does is that it further burdens them with another thing in line to look after and find a fix for. Also, the other guardian is expected to stay home and look after the house with the sudden passing of the other one, resulting in a massive dip in collective incomes. When recovering from the grief, life insurance often serves as a savior in helping you get a cover for the times that you take to hunt for a job or employment opportunity to keep things going.

The help from the life insurance provides the next in line guardian to get things on track without having to worry about the financial liabilities that they’re left with when the primary provider is no longer around. The proceeds can even aid for counseling that may be needed when faced with trauma.

4. Child Protection and Care

In cases where a stay at home parent suddenly passes away, an immediate need for an alternate caregiver is something that looms over the heads of the surviving family members. Children who are young cannot be left at home if one of the guardians is working full time. However, at the same time, it is a known fact that childcare can be quite expensive and strenuous for single parents.

Childcare for young kids and infants is an expensive pursuit that can be financially troubling for an emotionally troubled caregiver. In these times, the relief from the insurance can help ease the situation, and childcare can fully pay for.

In case that the child is older, a loss of a parent is a significant loss, which can often crumple their ability to be emotionally stable. Thus, the means to go for counseling is often helpful. If they have other immediate needs to look after, therapy services might be challenging to manage for the surviving family members. In this case, the insurance money helps make things smooth for the child, especially if they are young and not entirely financially independent. 

5. Debts and Final Expenses

The death of a loved one not just grips you emotionally from the moment it happens. Still, you’re immediately faced with expenses, which include medical bills and any other services that may be needed at the time of the funeral.

A family that’s already going through a tough time can find this as an unnecessary thing, but with the societal obligations at work, it’s crucial to plan these things. The burial and all the things that follow can often cost a lot. That is why, people who have higher income groups, tend to have life insurance to avoid this conundrum.

Still, for families who aren’t that well to do, this cost may seem even more significant. In addition to that, the deceased may have left some debts that are to be paid for despite their passing, especially if their death was something that the family and friends did not see coming. The indebtedness for housing or cars is often hefty. If the person who handled its responsibility passes away, the surviving family members can find it difficult to fund entirely.

Fortunately, the proceeds from the insurance can help make the higher debts go away so that families can focus on rebuilding their respective lives rather than covering for the deceased person’s expenses. 

In scenarios that the deceased person was fighting off critical illness, medical bills can also be something that is a cause of worry to the families. Hospitals often tend not to release the dead bodies if the bills aren’t cleared in time. Thus, having cash problems, looked after at that point can help make the situation comparatively less tense. 

6. Providing For Inheritance Claims

Many times, to get the inheritance transferred to your loved one, several estate taxes and other administrative costs need to be immediately paid to ensure the successful transference of ownership. The life insurance proceeds, in this case, tend to ease the burden of the families by helping them through off-setting either the whole amount or the partial amount of such taxes and aiding the process of transference.

The inherited assets often tend to have high emotional value for the surviving members – having suffered a loss of their close one, the hereditary material things can help them cope with the loss better. Some families may also want to use the inherited assets of other purposes that may include using them for any pending expenses or payments.

In cases where both the guardians are lost, this often serves as a safe harbor for children, and they have something in terms of a physical asset to safeguard their future interests. Hence, an estate tax and inheritance claim being taken care of become crucial for the grieving families.

7. Charitable Gifts

Some families, in the remembrance of their loved ones and to commemorate their lives, would want to make donations to charities, educational institutes, or other organizations. At times, this can also be a wish of the deceased or an important clause of their legal will.

In this case, the insurance proceeds can serve an ideal way for the family to create a legacy for their loved one. The immediate family is often taking care of their respective financial liabilities. For someone who had philanthropic drive, it would be ideal for them to have their ability and desire to do good in life even after their passing.

A named donation by the deceased can help the family grieve better and protect them emotionally, knowing that the legacy of their loved one will continue to live. Gestures of kindness in times of grief are often instrumental in recovering from the loss and wanting to get things back in order.

Get Your Financial Planning Started – Incorporate A Life Insurance Plan!

Admittedly, having to think about a life insurance plan can be daunting, but it’s only sane to do while you are around so that your family has nothing to worry about. It is scary to consider dying, more so having to plan for it as well financially, but the fact of the matter is that death is inevitable, and it may come at a time you don’t expect it to.

Most of us understand that we may need life insurance and that it is only smart to have a plan ready for ourselves and our families, but we often keep putting it on the sidetracks during our financial planning.

Even if you’re single, life insurance plans can and may protect your siblings and parents, especially in cases that you’re terminally ill. And, getting life insurance early on, especially when you have planned on getting married or starting a family, is only beneficial for you.

Upon death, families of the deceased have a lot of things to look after, not just in the moment but in the future, too: debts, rentals, medical bills, estate taxes, and future bills such as tuition fees and college costs. Thinking and planning is always a wise decision, especially if you have familial obligations and responsibilities under your nose.

Take A Safe Decision To Protect Your Family Today

At the end of the day, you’d be relieved if you know that even when you pass away, your family will be taken care of. So, discuss with your loved ones and reach out to an Insurance Company you trust today.

Before you sign a plan, it’s crucial that you calculate the amount of insurance that you might need while keeping in mind your expense layout. By doing so, you won’t regret paying for the insurance plan. In fact, when the plan you’re about to sign coincide with your future goals, you’ll be more motivated to pay the insurance company even more.

Only after you’ve taken things under consideration, enroll your family and yourself in a plan to save keep their money starting now. It’ll be the most important and safest decision to make for your family.

Cite this article as:
Editorial Staff, "How Getting Life Insurance Also Protects Your Family," in Medicalopedia, May 13, 2020, [Permalink: https://www.medicalopedia.org/8879/how-getting-life-insurance-also-protects-your-family/].