Parents of adult children: Here are 4 myths about life insurance
Life insurance is easily one of the most confusing insurance products out there, because no one is ever quite sure when the best time to buy is. With homeowners and auto insurance, it's easy. You buy those products when you buy a house, or before you close it. But life insurance? There are many situations where you might benefit from buying it, and then you have to choose from the many different options that may be presented to you. It can be even more confusing if you are the parent of adult children who have left home.
Let's say your children are grown. Chances are your house is paid off and you're about to retire (if you haven't already!). You might assume you no longer need life insurance. Nothing could be further from the truth! In many situations, you'll need life insurance even if your children are no longer financially dependent on you. Let's examine some life insurance myths for parents of adult children.
Life insurance myth 1: I should have enough money saved before I die to give to my adult children and their children.
Technically, that could be true. Long hours at work, excellent and prudent management of your finances, behind-the-scenes work, and so on—you might always be in a position where you're financially healthy enough not to need life insurance. But what if you die unexpectedly or don't live long enough to achieve the wealth goals you've always envisioned for your family? Things happen. Even though we don't like to think about them—and we certainly shouldn't dwell on them—we need to think about the future to protect our loved ones. There could always be fluctuations that negatively impact your investments, which could affect your plans even if you don't die. Life insurance is an alternative that creates an instant estate, leaving a legacy for your future generations.
Life insurance myth 2: My mortgage is paid off and my children are financially independent. I don't need life insurance.
That may be true, but if you were to die today, there's yet another person who could be left behind: your spouse. If your spouse had to live without you for 10, 20, or even 30 years, without life insurance, they might struggle to maintain the lifestyle you've worked so hard for.
Life insurance myth 3: It's far too expensive to buy life insurance later in life, even if I'm in good health.
Life insurance myth 4: I am not subject to federal estate tax, so I do not need life insurance to help me pay off my debts.
Tax laws don't tend to stay the same, and you could find yourself in a difficult situation if you suddenly become subject to a federal tax obligation. Even if nothing changes, this is a somewhat weak argument, as there are many other reasons why maintaining life insurance coverage in later stages of life is imperative. Life insurance can pay off things like outstanding debts, probate fees, funeral arrangements, provincial estate tax, and more—and in doing so, it allows your loved ones to focus on their financial situation (and their obligations) and spend time in the grieving process. Furthermore, if you have an estate or a business, life insurance can help to equalize the inheritance among your heirs.
Conclusion
A major decision, like buying life insurance, is not something to take lightly. Your life circumstances could change at any time, and you should always keep in mind what might be affected by your unexpected death. The good news is, you don't have to make this decision alone! Discuss your life insurance needs with the friendly life insurance brokers we have here at Panda7. We'll get to know you and your situation, and we want to help you find solutions. If you want to better understand your needs as a parent with adult children, consult with us today.