In Lieu of Flowers

by Alison Robb

Financial Frequency. mySecurity

September 27, 2019 .3 min read

In Lieu of Flowers...

Over the past few years, I have found myself attending more and more wakes and funerals. These wakes and funerals have either been for friends and family members who have either passed away or lost a loved one. Because of this, I have become acutely aware that many of those loved ones left behind are not financially prepared to handle the loss.

How do I know this? I read the obituaries and visit the GoFundMe page set up for the family.

Anytime you see fundraisers meant to raise money for college or to help out with bills after a death in the family; it's safe to assume either of the following:

  • life insurance coverage was not in place or
  • there wasn't enough life insurance to cover everything.

This leaves loved ones to rely on the kindness of others to help them out financially. The worst part is, it doesn’t have to be that way. The need for a GoFundMe and the stress that comes with being financially unprepared for a loss can and could be avoided if the individual had life insurance. It's always the better option, and quite frankly, it's the responsible thing to do.

No matter what your life looks like, divorced, married, single, kids, no kids, own a home or not, someone will be affected financially, should you pass away before your time.

Here are some important facts about life insurance that everyone needs to know so that the phrase “in lieu of flowers” will not be needed.

1. Life insurance through work is not enough. 

Getting life insurance through your work can provide some perks. Some perks include no underwriting requirements and lower costs. But most of the time, the amount of coverage you get is nowhere near the amount you need.

Not only that, but you also can’t take your policy with you if you leave your job, leaving you without any coverage. Individual life insurance policies provide more flexible and affordable options to guarantee your loved ones are financially protected.

2. Crowdfunding is not a substitute for life insurance. 

It seems like more and more people are relying on crowdfunding sites like GoFundMe to help families that are struggling financially after a sudden death.

But the reality is that crowdfunding campaigns often leave loved ones in the dark about tax burdens. This refers to the amount of money they'll actually receive and whether they'll even be able to raise the funds they need at all. Life insurance is always a better option because it avoids all the pitfalls associated with crowdfunding. 

3. Life insurance is affordable. 

One of the biggest misconceptions out there is that life insurance is expensive.

The reality is, for a fraction of your paycheck, you can ensure that your family can financially survive should you suddenly pass away.

For example, if a healthy 40-year-old wanted to purchase $250,000 worth of term life insurance coverage, it would cost:

  • a female around $22 a month and
  • a male costs roughly $2 more at $24 a month.

4. Life Insurance can be for the living too. 

The main reason we purchase life insurance is so that our loved ones will not struggle financially due to an unexpected death.

However, if you are buying a whole life insurance policy, it can also help you out throughout your life. A whole life policy builds cash value tax-deferred and you can take loans out against it.

The cash value can come in handy if you need money to help out with expenses, like your kid’s college loans or saving for your retirement. There are also return of premium policies that return 100 percent of the premiums paid back to you if you outlive the policy term. 

There isn't much you can do to protect yourself and your loved ones against the emotional impact of death. You can, however, protect yourself against the financial impact, making life insurance a powerful and vital tool for protecting yourself if the unexpected were to happen.

in this issue

  • safeguard your identity
  • date safe
  • cover your assets
  • protect yourself
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