Do I Need a Will if I Have Life Insurance?
Nobody likes to think about death. It’s completely natural to push those uncomfortable thoughts as far back into our minds as possible. Instead we focus on the idea that we’ll all live long past our kids blossoming into self-sufficient adults and go out on our own terms.
Unfortunately, life and death is unpredictable. According to Medical News Today, over 727,000 people pass away each year from cancer or accidental causes in the U.S. It’s a morbid statistic, but as parents, one we have to acknowledge.
You will never stop being Mom. So, what can you do now to ensure your child’s future success and stability in the unlikely event of the unexpected?
What is a Will?
A will is a legally binding document that states your wishes for how you want your assets to be distributed after your death.
Without a signed will that meets all legal standards, there is no guarantee that your desires will actually be carried out. If a will isn’t correctly completed, or doesn’t exist at all, it will be up to the state to determine what happens to your finances, possessions, and ultimately, your loved one’s future.
Though every state has different standards for what constitutes a legally binding will, typically you must be at least 18 years old and be of “sound mind.”
You also need to assign an executor of the will and have it signed by multiple witness.
Why Do I Need a Will?
A will is essential for the ultimate peace-of-mind that your family will always be taken care of on your own terms.
Without a will, how will your loved one’s really know how you want your finances and possessions distributed? Common questions often declared in wills include:
The amount to set aside for education
Who gets custody of the children
Distribution of property & prized possessions
When to distribute funds
Allocation of who gets what amount money
These questions are especially important for single parents. You are truly your children’s everything and ultimate protector. The last thing you’d ever want is to take a chance on their future.
How to Create a Legally Binding Will
Getting a legal will is usually extremely simple and affordable, or even completely free.
For many, what’s called a “simple will” is the best choice. As long your assets are fairly uncomplicated, simply typing out your desires in detail, as well as including your name, address, marital status and executor, and then having your witnesses and yourself sign and date, this method is legally binding.
If you have a complicated estate, or a very high income, we do recommend meeting with a lawyer to discuss your assets and options.
In addition, you may choose testamentary trust will which puts some of your assets into a trust fund. A third party will then control and distribute your assets based your stated desires.
Free wills are also becoming increasingly popular. Perfect for the majority of families, multiple companies now offering the ability to get a legally binding simple will in less than an hour.
What is Life Insurance?
Life insurance is the best way to ensure your family is financially protected no matter what. Every month, you will pay a monthly premium which will guarantee that you your loved ones will receive a sum of tax-free money that will be paid out in the event of your passing.
Ideally, this amount will be enough to support those left behind and supplement any income or services that you no longer can provide.
Why Do All Moms Need Life Insurance?
Whether you’re a stay-at-home-mom, or the primary breadwinner running a booming business, you need life insurance. The emotional impact of losing a parent is hard enough. Forcing your family to navigate and compensate for the financial loss only compounds grief.
Though there is no hard number as every family’s needs are vastly different, typically the rule of thumb is to purchase enough life insurance to cover your annual income times 6-8x. It’s also suggested to add the estimated amount of college education to that total.
But what if you’re a stay-at-home-mom without a salary?
Do you really think what you do has no financial value? Well, you’re not alone as there is a massive coverage gap between men and women.
However, think of just some of the jobs you provide for your kids every day: