The Finance Blogger

Life Insurance Estate Planning

Life Insurance Estate PlanningMany people find life insurance estate planning complicated and emotionally draining. It really does not have to be either of these things. With a little help, it can be simplified by answering the following questions. This is preparation for when you pass away. You will want to make sure that your estate is in good shape. This is the adult responsible thing to do as a parent and an adult. Make sure that your family is looked after when you are gone. It is emotional, but it is something we all have to face at one time or another.

Life Insurance Estate Planning – Basic Questions

For example here are some of the basic questions that consumers should ask themselves which will help them decide if they need life insurance as part of their estate planning and how much insurance they really need. Here is our list of questions:

  • What are your current debts and how will they be paid
  • Will your estate have enough funds to pay these debts
  • How many dependents do you have
  • How long will you need to provide financial support for these dependents
  • Will your current assets be sufficient to cover all of the above

Depending on your answers you may need to add some life insurance to make sure that your estate will have sufficient funds to cover each of these issues mentioned above. In addition, many people want to leave some form of legacy to their heirs and this is sometimes an amount of money that they know will be put to good use and will help them in their own lives.

For this reason, some consumers will also increase their life insurance coverage to provide some money for each of their heirs. This is certainly optional. Many consumers say they plan to spend everything before they die and that is ok too. We just believe that you should cover your debts and provide for your dependents so that no one needs to suffer for any reason.

People will also provide for their pets to make sure they go to a good home and that they are provided with food and lodging for as long as they live. Pets are part of the family and in some cases rank above other family members, It is hard to believe that this is the case for some families, but that is the way it is for some people.

Life Insurance Estate Planning – Wills, Executors, Division of Assets

Whatever you decide to do is your business; however, there is one area that we feel very strongly about when it comes to life insurance estate planning. Make sure you have a will and have appointed a set of executors to carry out the wishes of your will. Otherwise, the government will step in and make decisions that you might not have made had you been able to.

We also believe that the assets should be divided evenly among your heirs and you should not favor one or the other. Treat them equally and they will remain friends for life. Treat them unequally and they will become distant over time which is something we really do not think that anyone would want to see occur.

Life insurance estate planning does not need to be any more complicated than that. However, if you are more comfortable with working with a financial adviser or your lawyer this is ok too. Many have had a lot of experience in this area and can make suggestions regarding the preparation of a will and how much insurance you may need. Always seek independent advice from experts about life insurance. A life insurance salesperson will usually recommend that you need to purchase insurance. Ask for and obtain independent advice to obtain the best answer.

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