Most of us do everything we can to make sure that our families are well taken care of: we prepare healthy foods for our kids to eat and make sure that they wear their seatbelts. We make sure our spouses schedule their annual doctors appointments and check up on our elderly parents. After all, we wouldn’t want anything bad to happen to the people we love, right?
Unfortunately, though, the reality is that sometimes bad things do happen, even if we’ve done our best to prevent them. Ironically, as much as we worry about protecting our families in our day-to-day lives, many of us forget to think about how our families will be financially taken care of should the worst happen. To be sure, this partially arises from our discomfort with confronting our own mortality. But no matter how unpleasant thinking about our death or incapacitation might be, it’s crucial to be prepared – just in case.
Check out the information below for three tips to help you protect your family from the financial consequences of your untimely demise:
Have An Emergency Fund
In times of crisis, the last thing that anyone wants to be thinking about is money. However, there are significant expenses that come along with most tragedies, so keeping a stash of cash in an account that your family will easily be able to access will provide them with great comfort in their time of need.
Also, be aware that pay-outs from life insurance policies usually aren’t immediate – it takes time to process a claim and have it approved. You wouldn’t want your spouse to be unable to pay the mortgage or buy groceries if you (and your income) suddenly weren’t around. Hedge your bets and keep a fat emergency fund – you never know when it might come in handy.
Have A Will
When a loved one dies, the initial emotional impact is tough and takes time to get over. But one factor that will prolong the pain for months – or sometimes years – to come is a family feud over the assets that were left behind. The easiest way to avoid this is to have a will that clearly spells out how you want your worldly possessions to be divided.
It’s very important to keep your will updated, especially if there’s a major change in your personal or financial life. You wouldn’t want an ex-spouse to end up with a valuable asset because you forgot to make changes to your will when you got remarried, right?
This one might seem obvious, but its importance can’t be overstated: having a solid life insurance policy in place is one of the best ways to make sure your family will be provided for if you die unexpectedly. In most cases, purchasing a level term life insurance policy is easy an inexpensive, so there’s really no excuse for not having it. Again, being well-insured is absolutely essential to your family’s financial security, so if you don’t have life insurance, drop what you’re doing and purchase a policy – right now!
Part of being a responsible member of your family is making sure that your loved ones will be financially protected in the event that tragedy strikes, so be sure you’ve covered the three bases outlined above. Hopefully you’ll never have to use any of them, but the peace of mind they provide is truly priceless!