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If you are like most individuals, you are naturally concerned about your family’s financial health. For example, what would happen if you died suddenly? Would your family be financially prepared for such an event? Although this is an unsettling thought, it nonetheless needs to be addressed.
Thankfully, there are a whole host of solutions that will give you and your loved ones the peace of mind when it comes to these often-ignored issues. Here are three things you can do to lessen the burden on your family when the worst case scenario comes true:
Have An Emergency Fund
It took us a long time to figure out how much money to keep in our emergency fund. However, our feelings of security have only increased along with the size of our designated account. At this point, we keep approximately 6 month’s living expenses in our emergency fund for the unexpected things in life. And although I hope we never have to use it, I’m still glad it’s there.
An emergency fund can also come in extremely handy when disaster strikes. For example, it often takes several months for insurance companies to settle after the death of your loved one. If you are relying solely on life insurance to get you by, you might feel extremely stretched during the time. On the other hand, an adequate emergency fund can fill the void by providing funds while you wait for your check.
Have Life Insurance
Of course, for your emergency fund to work properly, you need to have life insurance in the first place. Life insurance is the single and most important consideration to take into account since it is specifically designed to assist your family when traumatic events occur. The main role of life insurance is to provide financial remuneration to your beneficiaries should you become ill or even pass away. Since there are many types of life insurance, their associated benefits will likewise vary. Payments can be distributed in a lump sum or they can be paid out on a monthly basis. This will normally be at the discretion of the policyholder and the beneficiaries themselves (your spouse and any children).
Imagine how your family would feel if you were to die unexpectedly. Now imagine how they would feel if you died suddenly and your spouse was left with tens of thousands of dollars in unsecured debt. In the first scenario, your spouse would likely be devastated, but would ultimately persevere. In the second scenario, your spouse would not only be left to deal with your untimely death, but would also be left to deal with the mess you left behind.
That’s why living a debt-free lifestyle is so crucial throughout every stage of life. We didn’t realize how important it was until our late 20’s, but I’m still incredibly glad we caught on. If we weren’t debt-free and something were to happen to me, I absolutely hate to think of my family struggling due to financial decisions from my past.
Preparing for an Unlikely Death
Preparing for unlikely events isn’t always fun, but it’s necessary if you have a family. Now that we have these issues squared away, I can rest assured that things will be taken care of if the worst were to happen. Can you say the same?