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Who Needs An Estate Plan When You Have Life Insurance?


Life insurance is one of the least fun things a person can buy.  It invites gallows humor, like, “I’m worth more dead than I am alive.”  As people return to social events after a year of isolation where there was nothing to do but watch newscasters count the number of people who had died from COVID-19, bars and poker nights are about to buzz again with stories of wives who sent their husbands on increasingly dangerous errands in anticipation of life insurance payouts.  If you are too young and too poor to think about things like revocable trusts and the annual gift tax exclusion, then buying a life insurance policy is one of the best financial decisions you can make.  The real estate planning begins when you outlive your life insurance policy, but even if yours has some years left on it, it is not too soon to contact a Central Florida estate planning lawyer.

Life Insurance Is for Young People

When you buy a life insurance policy, it means that the listed beneficiaries will get a set amount, usually tens of thousands or hundreds of thousands of dollars, if you die while the policy is active.  You can choose anyone as a beneficiary, but most people choose their spouse or children.  If you are of working age and are the sole source of financial support for a family member, it is a good idea to carry a life insurance policy with that person as the beneficiary.

Life Insurance for Old Folks Is Nice, but Long-Term Care Insurance Is Better

People buy life insurance with the intention of never using it.  A life insurance policy for a healthy person in their thirties costs pennies per day; if you are still alive and still working when your 20-year or 30-year life insurance policy expires, it was well worth it to spend such a small amount of money.  But then what?  Do you renew the policy?  If you do, it will be much more expensive.  A 60-year-old has a much higher risk of dying soon than a 30-year-old and therefore costs more to insure.

If you are financially secure at age 60, you might not need to renew your life insurance policy.  When your kids are minors, the best way to ensure their financial stability is by staying alive and working, with your life insurance payout as a worst-case scenario backup plan.  When your children are grown, the best thing you can do for your finances is to keep yourself from depending on them financially.  That means saving for retirement and carrying long-term care insurance.  Remember, you are worth more alive than dead, just as estate planning is mostly about planning for life.

Contact an Attorney Today for Help

Not being insurance-poor is good financial advice, but a Clearwater estate planning attorney can help you decide which types of insurance coverage are worth the cost in your situation.  Contact William Rambaum for help with your case.



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