Americans have a very small chance of dying between the ages of 30 and 50, less than half a percent a year for both women and men. These possibilities increase with age: almost 3% of women of 30 years and 5% of men will not reach their 50 years. Among 50-year-olds, 8% of women and 13% of men do not live until the age of 65.
Maybe you lost a friend or relative early in their life or contributed to a GoFundMe campaign for a family in this situation. You have probably heard of a bad car accident with victims. You shiver, don't you? It is frightening. So you think, "Oh, this could never happen to me." It is human nature. Nobody likes to dwell on unpleasant possibilities.
Stay with me for a minute, though. Suppose you died before someone expected. How will your family manage without your income, your guide and your emotional support?
Coping with a tragic loss will always be difficult. But now you can do three things that will help your family cope with the terrible impact of getting lost.
Get enough life insurance
The loss of a parent could be financially and emotionally devastating. If both parents worked, one remained at home or there was only one parent, the family will experience pain and a potential financial crisis. It is easy to measure the reduction in earnings when a householder dies. Add up the after-tax earnings from now until retirement (life insurance benefits are tax-free). For the parent who works at home, the financial impact is more difficult to quantify. You can project childcare costs from now until children no longer need them, but other parent's earnings are also likely to decrease because they would have expanded homework.
Every parent needs sufficient life insurance to financially support the whole family in the event that imaginable occurs. For almost everyone, term life insurance – which guarantees an indemnity in the event of death for a specified period of time or "duration" – is an excellent choice. Whole life insurance brings together insurance and savings. It is more complicated and expensive than the term and most people do better by keeping their insurance and savings separate.
Online calculators can help you understand how much coverage you need, and many insurance companies also offer online quotes. Life insurance is a competitive market. It is advisable to get quotes from different companies and choose the one that offers you the best combination of price and quality. You can find independent insurance company ratings on AM Best or ask an independent insurance broker to help you.
Prepare a real estate plan
Creating a real estate plan allows you to control who inherits your assets and takes care of your children if you die. If you do not draw up a written property plan, the courts will distribute your assets and assign protection to your children under state laws. Guess what? Courts may not make the same decisions you would like.
A wealth plan is made up of wills and / or trusts and, most importantly, the beneficiaries' designations on pension accounts and life insurance. You can hire a lawyer to help you develop your wealth plan or use online resources like legalzoom or Nolo. Each state has different real estate requirements, so be sure to follow local laws when drafting any legal documents. If your situation is simple, the online approach may work for you and legalzoom offers access to the legal reviews of the documents you create.
Real estate planning isn't fun – it requires thinking about your own death – but it provides essential protection for your family. He is a first class adult.
Organize and communicate
If something happens to you, will your surviving family know what to do?
Don't keep your plans secret. Talk to the people you have chosen to help your family in the event of a tragedy. Tell them where your important documents are (especially your real estate plan). Make your wishes clear. This is a particularly important conversation to have with the person you have chosen as your children's guardian.
Make sure your financial accounts are easy to locate. Make a list of your accounts and financial institutions. Keep the list with your important documents. The list may be electronic, but a will still has to be present in most states. Make sure that the people who will need to access your accounts have the list and passwords.
Life insurance helps your family replace your income and take care of your children if you die. Your estate plan ensures that your assets will support your family as you wish and that your favorite guardian will take responsibility for your children. Organizing your assets and your real estate plan and telling your designated ones both will make navigating a seemingly impossible situation for your family much easier.