Not only can cash from a help settle present financial matters, it can also ensure that your family’s dependents are taken care of down the road through a trust. Children are the most in need of financial support that can stretch from a few years to a lifetime. Additionally, you or your spouse may need funds during the grieving process before returning to employment.
How much financial support your dependents need depends on your family’s situation.
In addition to any children you have had with your spouse, you should consider the support of any children you may have from a previous marriage, advises Edward E. Graves, author of “McGill’s Life Insurance.” The death of an income-earning family member could financially impact multiple households.
Another issue to consider involves children with physical or mental disabilities that prevent them from becoming self-sufficient. Institutional or home care can be expensive and possibly require financial support beyond you and your spouse’s lifetimes.
Specialist Donna Scalaro of The Hartford stressed the importance of creating a special needs trust for children with physical or mental impairments.
“You should really establish a trust for your child and fund it with life insurance,” says Scalaro. “This way the parent would be able to provide for the child, supplement their living expenses and not jeopardize the child’s eligibility for additional government benefits.”
Whatever the needs of your child, you’ll want to make sure they’re taken care of. The proper life insurance policy can provide immediate resources that would periodically provide them with an influx of funds.