How life insurance for widows can benefit your family
With the death of a spouse there may be many financial and legal matters to attend to: making arrangements for the funeral, updating your will, updating bank and credit card accounts, getting financial assistance for widows through government agencies like Social Security, and many more things that could involve a lot of paperwork.
Doing all of these things while still grieving can certainly be stressful. And now that you’ve experienced the emotional and financial impact that comes with losing a spouse, you may be more aware of the need for life insurance.
Why do widows need life insurance?
Widows may see the need for life insurance in order to plan financially for any children they may have, whether they are still young or not. Life insurance for widows can also help when planning for older years, final expenses, and any legacies they want to leave behind.
Providing for young dependents through life insurance
If you have children with your late spouse, it can be important to create a number of plans for their care in the case of your loss. Part of that planning might include providing financial benefits for those who will care for your children.
You could help make it easier for a loved one to provide for your children by enrolling in a life insurance policy. With a well-planned policy, you can make sure the loved one you’ve chosen as the custodian can manage the death benefit funds until your children become adults.
Life insurance to help your adult child who takes care of you
Getting life insurance is not just for the benefit of younger children. If you’re an older widow, caring for you as you age could involve dealing with health problems. If your caregiver had to help pay your medical expenses and meet everyday cost of living needs, this could become financially draining. Plus, he or she may have to hire extra help to look after you.
A plan with available living benefits, those that can be withdrawn before your loss, can help provide a financial cushion for an adult child who may have take care of you in your older years.
Paying for debt with life insurance
Paying for debt may become the responsibility of your family after your loss. Having a secured life insurance policy could help your beneficiaries pay these debts without having to take on the burden themselves.
Life insurance to help pay your final expenses
Life insurance can provide financial assistance for widows to help pay for burial and funeral expenses. The median cost for an adult funeral with a viewing and burial was $7,848 as of 2021. This cost is closer to $6,971 for cremation.
As a widow, you may have already experienced how difficult it can be to pay for a funeral when you don’t have money saved up to spend thousands of dollars. You may have had to dip into whatever emergency funds you had or ask family members for help. So by insuring your life, you could help your loved ones avoid worrying about how they’re going to come up with the money to pay for your final expenses.
How to use life insurance for estate planning
All your assets could be subject to estate taxes upon death. If you inherited significant assets from your spouse or have a high net worth of your own, there’s a good chance your heirs will have to pay a huge amount of taxes on your estate.
To possibly reduce your taxable assets, you can transfer your life insurance to an adult child. In doing so, the policy still covers you, and your adult child receives the death benefit when you die.
Life insurance as a legacy
If you already have funds set aside to take care of your final expenses and help supplement your retirement income, you can choose to get a life insurance policy just for the purpose of transferring wealth to your children and/or grandchildren or donating to a charity.
What are the best life insurance options for widows?
The best life insurance for widows will depend on their personal needs. In general, policies that can help meet permanent needs (like caring for dependents or helping adult children care for you) will likely be a better fit than policies only needed to meet short-term needs (like final expenses and debt pay-off).
There two main types of permanent life insurance you can choose from: whole life and universal life. Both types of policies build cash value that grows in interest.
Whole life insurance coverage for widows
Whole life insurance provides guaranteed level premiums and a guaranteed death benefit. Level premiums mean that you pay the same amount every year, which can be beneficial if you’re a widow on a fixed income. As long as the policy is active when you die, your beneficiaries will receive the death benefit.
Additionally, policies build cash value in two ways: (1) guaranteed cash value which can be taken out as a loan* that you don’t have to repay and (2) dividend cash value that you can get as cash**. These options can provide supplemental income you could use before or after you retire.
Universal life insurance coverage for widows
Universal life insurance is designed to change as your needs change, which may work best as you try to make adjustments to your life as a widow. You can decide to pay more or less in premiums depending on your financial situation at the time.
If your policy has enough cash value, you can even use the cash value to cover the cost of premiums instead of paying out-of-pocket. However, the policy may cancel if it runs out of cash value (which can happen if you pay too little in premiums). If you want to pay more than the recommended premium, doing so will make the cash value grow even faster.
The death benefit can also be changed after you enroll in a policy. You can increase the death benefit, usually by passing a medical exam, so that your beneficiaries receive more money. Or you can decrease the death benefit, which will lower your premium.
Figuring things out with the help of a licensed insurance agent
Are you ready to take the next step toward enrolling in a policy? One way to help make sure you’re well-informed on all your life insurance options is to meet with a licensed insurance agent.
A licensed insurance agent can help you assess your financial needs to identify where life insurance could help fill the gaps. They can also help you sort through your coverage options so that you can pick the plan that meets your needs. Plus, their services come at no cost to you.
Get answers to questions you may have about getting life insurance for widows by meeting with a local agent, or give us a call at (800) 827-9990.