- How life insurance can be an immediate source of funds
- June 12, 2015
Death benefits from a life insurance policy can be paid within a few days of the claim being filed and is an excellent source of immediate cash for one’s survivors, according to McGill’s Life Insurance editor, Edward E. Graves.
Many do not want to think of what would happen to a family member whose income stream terminates after death. Many do not have emergency funds to rely on either, though most should plan a fund early on just in case.
If the life insurance policy has been in-force for less than two years, it is still in the contestable phase, meaning the insurer can deny or delay payments if the situation seems suspicious. However, once it has been resolved, proper payments will be issued to the beneficiaries.
During the grieving process, we may not be able to think clearly as our brain is still trying to grasp what has just happened. As a result of this, we tend to forget about the cost of everyday necessities – such as food, transportation and utilities – or paying bills.
Even though the loved one has passed away, mortgage payments and loans still need to be paid. A life insurance policy can help pay these and other expenses.
While everyday expenses are less likely to be forgotten, it is also important to remember other expenses the insured might have had – such as club memberships and magazine subscriptions. It is important to not only cancel these payments but to also pay off final payments for them.
It is also advisable for the insurer to list out all expenses, payments and other final payments in their insurance policy, so beneficiaries will know what to do when they pass away.
Education costs are important to consider if children attend private schools or colleges. Some life insurance may not be enough to continue that education.
For example, after the death of one woman’s husband’s insurance policy, there was not enough money to continue private education. However, she was able to get her children through one year and then reduce her costs by enrolling her children in public education.
And, of course, there are final expenses to consider – such as burial, cremations as well as other costs that may include estate fees.
Obviously, financial and estate planning are essential when establishing the best policy with a qualified life insurance adviser that can help plan your settlement needs.
- Category: Articles Library, Life Insurance
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