Last Updated on August 15, 2024 by Chris Franchina
Last Updated: August 15th, 2024
The Importance of Legacy Life Insurance for a Worry-Free Future
As we enter the golden years of our lives, it’s natural to reflect on the legacy we want to leave behind for our loved ones. While it may not be the most pleasant topic, it’s crucial to discuss the importance of legacy life insurance or final expense life insurance. In this blog, we will delve into why this form of insurance is essential in preventing financial burdens on your family and ensuring a dignified farewell. We’ll also shed light on the expenses associated with final-expense arrangements and why planning ahead can make a world of difference.
Understanding the Cost
of Final Expenses:
Peace of Mind for Your Loved Ones:
Dealing with the loss of a loved one is emotionally challenging. Adding financial stress to the mix can be overwhelming for those left behind. By taking the proactive step of obtaining legacy life insurance, you provide your family with peace of mind during an already difficult time.Helping your loved ones alleviate financial stress can give them the space and time they need to focus on processing their grief and honoring your memory.
Securing Your Family’s Financial Future:
Tailored Solutions for Final Expense Coverage:
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Have open and honest conversations with your loved ones about your end-of-life preferences and financial arrangements. By discussing your desires and plans ahead of time, you can help them understand your wishes and ensure that they are adequately prepared.
Important numbers
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- According to the National Funeral Directors Association, the average cost of a traditional funeral in the United States has been steadily rising and now exceeds $10,000, which includes services, burial, and related expenses.
- A survey conducted by GoBankingRates revealed that 34% of Americans have less than $1,000 in savings, highlighting the financial vulnerability many families face when unexpected expenses arise, such as funeral costs.
- The American Association of Retired Persons (AARP) estimates that the average out-of-pocket healthcare expenses for individuals aged 65 and older can range from $3,000 to $7,000 per year, potentially leaving a financial burden on surviving family members.
- According to a study by CNBC, approximately 30% of funeral expenses are paid for by surviving family members through personal savings, credit cards, or loans, which can result in long-term financial implications and debt.
- The National Institute on Aging reports that older adults are more likely to have outstanding debts, including mortgage payments, credit card bills, and medical expenses. These financial obligations can place an additional burden on family members after a loved one’s passing.
- In a survey conducted by the Life Insurance and Market Research Association (LIMRA), it was found that 40% of households would experience immediate financial trouble if the primary wage earner were to die unexpectedly, indicating a significant need for life insurance coverage among older individuals.
- National Funeral Directors Association – “NFDA Releases Results of 2019 General Price List Study” (nfda.org)
- GoBankingRates – “Survey: 34% of Americans Have Less Than $1,000 in Savings” (gobankingrates.com)
- AARP – “Healthcare Costs for Older Americans” (aarp.org)
- CNBC – “Death isn’t cheap: The average funeral now costs more than $7,000” (cnbc.com)
- National Institute on Aging – “Debt in Older Adults” (nia.nih.gov)
- LIMRA – “The Facts of Life and Annuities: 2019-2020” (limra.com)
Frequently Asked Questions About Legacy Life Insurance
1. What is legacy or final expense life insurance?
Legacy or final expense life insurance is a type of insurance policy specifically designed to cover the costs associated with end-of-life arrangements, such as funeral expenses, outstanding debts, medical bills, and other related costs. It provides financial protection for your loved ones and ensures they are not burdened with these expenses after your passing.
2. How is legacy life insurance different from traditional life insurance?
Legacy life insurance policies typically have lower face values compared to traditional life insurance policies. They are designed to provide coverage specifically for final expenses rather than long-term financial protection. Legacy life insurance policies are often more accessible and affordable for individuals in their senior years.
3. Who Should Consider Legacy Life Insurance?
Legacy life insurance is particularly beneficial for individuals aged 55 and above who want to ensure their final expenses are covered and prevent their family from bearing the financial burden. It is also suitable for those who may have limited savings or assets to cover these expenses.
4. How much coverage do I need for legacy life insurance?
The amount of coverage you need depends on various factors, including your anticipated final expenses, outstanding debts, and any other financial obligations you want to address. It’s essential to consider funeral costs, medical bills, legal fees, and potential outstanding debts when determining the coverage amount.
5. Is a medical exam required to obtain legacy life insurance?
Many legacy life insurance policies offer simplified underwriting or guaranteed acceptance, meaning you may not need to undergo a medical exam. Instead, you may be asked a series of health-related questions on the application. This streamlined process makes it more accessible for individuals with pre-existing medical conditions.
6. Can I change my legacy life insurance policy in the future?
Most legacy life insurance policies are permanent policies, meaning they remain in effect until you pass away or cancel the policy. However, some policies may offer the option to convert to a traditional life insurance policy in certain circumstances. It’s important to review the terms and conditions of your policy to understand your options.
7. How do I find the right legacy life insurance policy?
It’s advisable to consult with a qualified financial advisor before purchasing a Fixed Index Annuity. They can evaluate your financial goals, risk tolerance, and overall retirement plan to determine if an FIA aligns with your needs. A financial advisor can also help you understand the terms, features, and potential risks associated with FIAs.
