do you really need the extra insurance?

Three Reasons To Consider A Term Life Insurance Policy In Your Senior Years

by Rick Mcguinness

Term life insurance policies have become increasing important in estate planning, especially for those of limited economic means. The following are three ways they may be able to help you.

To not be a burden on family members

If you don't have much wealth, at least not enough to cover your funeral expenses, a term life policy may be a good idea. There are life insurance policies that are designed to pay for your expenses that are incurred after you die. The expenses may include a casket, burial or cremation, funeral services or anything else you wish to have. You can even name a funeral home as the beneficiary. Everything is taken care of, and your loved ones will not have to worry about paying for the funeral expenses.

It is a way of leaving a small inheritance to a loved one

If you owe any money at the time of your death, your creditors cannot touch the proceeds of a term life insurance policy. This includes any back taxes you may owe to the Internal Revenue Service. The beneficiary that you have named will receive the money. So even if you have debts and few, if any, assets, a term life policy is a way of leaving a little behind for a loved one. This may not be a large sum of money, but a few thousand dollars for a loved one can really help out. The best way to go about doing this is getting a policy for an amount greater than your end of life expenses. So there will be a extra money left after paying for your funeral.

To pay off debts after you die

After you die, your estate will need to go through probate. Any outstanding debts that you have will be paid with the assets you had at the time of your death. Naturally, if you have liquid assets, they will be used to pay off your debts. But if you have certain physical items of value that you want to hand down to your children, you should consider getting a term life policy. Otherwise, some of these items may be sold in order to satisfy your debts. The best way to go about this is to name your estate as the beneficiary, so your debts can be settled and the physical assets will not be sold but passed on to your loved ones named in your will.

Term life insurance policies are a low cost way of protecting your loved ones from financial hardship. They also can protect assets that you want to pass down to your family, and they can even serve as an inheritance.