Companies advertise life insurance as the solution to all your future planning needs. The insurance provides funds to support your spouse and children if anything were to happen to you. Many purchase life insurance and stop there. But most also need a will, a trust, or other estate planning to fully protect their families.
Life insurance has many benefits. These include low premiums for opening a new policy, flexibility in premium payments, and tax benefits. Most importantly, life insurance provides peace of mind that your loved ones will have financial support should you pass away. To maintain it, you must continue to pay premiums.
However, term life insurance only covers you for a set period of time. If you are in poor health when the term ends, you may not be able to secure new life insurance. If you try to buy life insurance for the first time when already in poor health, it may not make financial sense.
A will or trust protects your family in ways that life insurance cannot. A valid will or trust lasts a lifetime, and you can change it at any time without paying pricey premiums. It does not matter if you are in poor health – anyone can make a will or trust. Nor does making a will or trust cost a lot of money over time.
In addition, wills and trusts are much more customizable than life insurance. With a will or trust, you can gift any of your assets to specific relatives or friends, rather than only permitting a lump sum payout. You can also explain exactly which pieces of your property go to which person or charity. You can make plans for who will get your house, who will care for your pets, and more. Life insurance only allows you to specify beneficiaries who may get paid by the insurance company.
Life insurance has many benefits on its own, but purchasing life insurance is not a substitute for executing a will or trust. A proper estate plan serves to make sure all of your wishes are carried out after your death, not just financial support for loved ones.
Planning your estate? Angela Klenk, Esq. and the team at Beach Cities Estate Law couple personalized attention to your estate plan with big law firm experience for a winning combination to give you peace of mind. To schedule a case evaluation, visit Beach Cities Estate Law online or call (424) 400-2125.