Getting Life Insurance? Don’t Forget to Make a Will
Your reason for getting life insurance is that you want to be able to help your family out financially even after you pass away. Coverage exists to help your designated beneficiary be able to support themselves despite the fact that you are no longer there to provide for them.
Still, getting life insurance isn’t the only precaution you need to take in order to prepare for your eventual death. You have to comprehensively plan to settle your estate, and this includes preparing a Will and other testamentary documents. In conjunction with your life insurance, this step can help make sure your loved ones can receive the full estate to which they are entitled.
Why Life Insurance is Important Following Death
No one knows when they are going to die. You hope it’s not for many years, but the fact of the matter is that no one is promised tomorrow. That’s why anyone who is future-focused wants to be able to ensure that their loved ones are taken care of, even if the breadwinner dies. You might die when a child still needs to go to college, or when a spouse still has a mortgage to pay off. By providing life insurance for them, you can ensure that those left behind will still be able to move on with their lives securely.
However, to make your life insurance go where you want it, you’ll likely need to explicitly outline your final wishes. At minimum, you should clearly state the intended use of this money in your Will.
Preparing Your Will
You have a Will because you want to outline the distribution of their property following your death. A Will is a legal mechanism that makes sure your money, possessions and other assets go to the appropriate people at the appropriate times.
Life insurance is one of these pieces of property. Therefore, within your Will, it is a good idea to note:
- That you have a policy
- What the value of the policy is
- The designated beneficiary of the life insurance funds
- Where you want your life insurance money to go (if you desire a specific use for the money)
Furthermore, your Will can also outline your wishes for how your final expenses are to be paid, and how the rest of your estate is to be settled. Your survivors can use life insurance funds to settle these expenses, and therefore your Will can act as a guideline to how your money is to be used.
Some of the instructions that your Will can outline might include:
- Wishes for your funeral, such as for services and internment.
- Recipients of financial assets such as savings, retirement funds or stocks and bonds.
- Recipients of personal effects of value.
- Rules for paying outstanding debts.
Make sure you fully establish your Will while you are still of sound mind and body. Also get certification from legal representatives to approve the Will by law. By doing so, you can safely provide financial assets for your survivors without any questions about their financial safety.