During any recession, people try to look for ways to cut their monthly costs. While this is a smart money move to make, getting rid of your life insurance isn’t an expense you can afford to lose. In fact, you should start a life insurance policy before the next recession if you don’t already have one in good standing. Aside from the death benefits, there are more reasons to keep your life insurance active.
Cover Your Mortgage Payments
There’s no way to anticipate when your time will come, and a life insurance policy will prepare your family for that eventuality. When you do die, your loved ones may not have the financial resources to keep up with your mortgage payments right away. Your policy should provide enough money to cover several months’ worth of expenses. This will give your family the money they need to keep up with mortgage payments and other bills.
Compensate for Your Final Taxes and Debts
Even if you die when the economy is doing great, your estate will be subject to taxes and final requests from your creditors. Any assets included in your estate will be liquidated to cover those debts, and that may leave little for your spouse or children. When you have life insurance in place, the money from your policy payout will go directly to your beneficiaries. It won’t be subject to probate, and that means you can trust that your loved ones will get the money you intend to leave for them.
Cover Your Investments
A crucial part of personal finance is investing for your retirement. Unfortunately, a recession can drain all of the money you have saved for your future. If you lose that money and die before you can grow more wealth, your spouse may be left in a bad situation. A life insurance policy with sufficient coverage can compensate for your losses. In that event, your spouse will have enough money to cover their living expenses for a short period of time.
There are several options for life insurance coverage. An insurance agent in your community can help you explore the best options for your situation. They can also help ensure you obtain enough coverage for your family. Even if you already have a policy, it can’t hurt to review it and make updates to your coverage.