September is Life Insurance Awareness month and this post is in partnership with TermLifeInsurance.com, which helps spread awareness of the importance of term life insurance. Learn more about how you can protect your family and your finances.
“Rich people plan for three generations . Poor people plan for Saturday night” – Gloria Steinem
When I first read this quote, it stung a little. It stung because I didn’t want to believe it, but when I thought about it, it’s kind of true.
Rich people tend to plan ahead for generations to come, whereas others are thinking about what to do on the weekend. I’ve been guilty of this line of thinking, simply looking ahead, but not really thinking about the long-term. But looking ahead and planning now can help you protect yourself, your family and your finances.
Though I grew up with everything I needed, my parents and grandparents grew up with very little means — it was hard to plan ahead financially with such little resources.
I’ve written before about my grandmother who was a single mom to six kids trying to make ends meet. After my grandfather’s death, the family was left with next to nothing and my grandmother valiantly carried the weight and supported the family working a variety of jobs. I’ve also talked about how my mom is the sole income earner in my family.
In situations like this, where there is one income earner, life insurance is imperative to protect those left behind who relied on the breadwinner for support.
Life insurance can help cover the costs associated with the funeral and also provide much-needed funds to cover the loss of income, so that the family can carry on as best they can.
While life insurance undoubtedly helps married couples and those with kids, it can also benefit borrowers with student loans, as well as co-signers on the loan.
While some student loan debt is discharged upon death, some debt may linger on and be transferred to your family, especially if they are a co-signer. A co-signer is legally responsible for your debt and if you die, the burden of debt then falls to them.
On the other hand, if your co-signer, such as a parent or grandparent passes away, that could trigger an automatic default, which means that the remaining balance is due immediately.
Dealing with a death in the family is already heartbreaking and having to deal with financial stress on top of that is salt on the wound.
In personal finance, we often talk about the value of saving, paying off debt, and investing. Yet, we rarely discuss the benefits of insurance.
Life insurance may seem like “just another thing” or an unnecessary expense, but for the price of a dinner out each month you can protect your family and sleep well at night knowing you won’t leave them in shambles should you pass away unexpectedly.
And isn’t that what being rich is all about? Being rich isn’t so much about your net worth, but the ability to take care of yourself and your family, without worry, when the worst of life hits.