Talking about life insurance is not something people really want to do. It requires not only considering our own mortality but having to put a financial value to ‘what if I die’. It does not happen very often thankfully, but at Clawson & Pelerin we do occasionally have the difficult and heartbreaking task of explaining to a grieving client that they no longer have enough money to live on after the death of their spouse.
The heartbreak of losing a loved one is hard enough, but that loss also tends to include big financial changes. A widow or widower may discover that their income will go down considerably giving them less than what they are used to for living expenses. To make ends meet it may require having to sell a home, valuable assets, and possibly – if retired – having to return to the workforce.
Unfortunately, a lot of people do not even consider the future and think about what may happen financially if they were suddenly to die or if their spouse dies. It is not something we want to ever dwell on. However, it is vitally important to you and your loved ones to take the time to look into life insurance options and plan ahead so that your spouse is provided for if you were to die. If you do not already have life insurance, consider meeting with a financial planner like John Clawson in Winchester Virginia, who can review your financial situation and help you determine your insurance needs and find a plan for your family.
Why do you need life insurance?
When contemplating life insurance, ask yourself: Will someone in my life be adversely affected financially by my untimely death? If you own a home, a business, or have personal liabilities, your heirs will become responsible for addressing those liabilities. Your spouse will be financially responsible and may end up having to pay your debts after you have passed on.
If you have loved ones that depend on your financial support for their livelihood, then life insurance is a must. Upon your death the life insurance payout may become your family’s sole source of income. It is especially important for parents of young children or adults who would find it difficult to continue their standard of living if they no longer had access to the income usually provided by their significant other.
It is never too late or too early to get life insurance, but premiums do become progressively more expensive as you age. Getting a life insurance policy in place when you are younger helps ensure your family is taken care of and that you are in a better position financially to pay for it.
No amount of money could ever replace a person; however, life insurance can help provide protection for the uncertainties of life.
If you already have life insurance
If you already have life insurance, it is important to check on your policy to see if it is adequate to cover survivorship. In some cases, a life insurance policy is not going to be enough. This is especially true when it comes to Group Life Insurance, which is offered to employees at many companies often for free or at low cost. Having this insurance while employed is a good benefit, but it is not adequate. The last day on the job before moving on to a new company, retire, or get laid off, is the day your employer Group Life Insurance benefits end. If you were to die after your last day of work, the insurance will not apply, and your survivors get nothing from this policy.
Do not expect social security to fill the void. Not everyone realizes it, but if your retired spouse dies you will only receive half of the social security survivor benefits.
For federal employees, we feel it is also important to look into joint annuity. This insurance product continues to make regular payments as long as one spouse lives. It also gives the advantage of providing income when people live longer than expected. However, if you have not signed up for joint annuity and you were to die, your spouse would not receive the payments. John Clawson, a financial advisor in the Winchester area, takes the Pension Max Strategy approach. This would take the Single Person life insurance policy on the pension holder and maximize it for the spouse through a second life insurance policy. This approach protects survivor benefits and ensures the loved one is taken care of. No matter the approach John will review your personal situation and help you update your policy to cover survivorship, or he will find you a policy that protects you and your loved ones.
By checking on your life insurance policy and putting a plan in place, you will no longer have to question whether your spouse and heirs will be taken care of when you are gone. It will help your family through an otherwise difficult time of loss.
Contact Financial Planner John Clawson Today
Like most things related to the financial planning arena, insurance can seem complicated and overwhelming. Seek help from an experienced and professional financial planner in Winchester like John Clawson. His knowledge as well as empathy are great assets for helping you pick the right plan for you and your loved ones. To schedule a complimentary, no obligation, financial review and discuss your life insurance options contact John Clawson today.
Read "The Value of Insuring Against Life's Risks"
This is meant for educational purposes only. It should not be considered investment advice, nor does it constitute a recommendation to take a particular course of action. Please consult with a financial professional regarding your personal situation prior to making any financial related decisions. All insurance guarantees are based on the financial strength and claims paying ability of the issuing insurance company. (11/20)