Paying for your final resting place

Every single one of us will take our last breath.  It’s inevitable.

We need to plan for our final expenses, so that the cost doesn’t fall on others.  The usual way of setting aside monies for this is called a Life Insurance Policy.  There are different types, whole, term, 20 payment life as well as amounts from $1,000. up into the millions of dollars.  The type and amount you choose should depend on a few things.  Not everyone needs the same type or amount (don’t ‘over insure’),  As with anything, there are ‘exclusions’ – rules where they won’t pay out.  Ask questions and read the policy yourself before you sign.  At the time of your death, the insurance policy is paid out to your beneficiaries to pay all of your final expenses.  Once all is paid, any remainder is theirs to keep – tax-free.

Whole Life is a policy where, after you’ve chosen an amount, you pay the premium all along.  It builds cash value to use later in life or will add to the death benefit.

Term Life is a policy where, after you’ve chosen an amount, you pay the premium up until a certain age specified in the policy — for instance 75.  Once you turn 75, you are no longer covered.  The policy has ended.

20 Payment Life policy is just that.  You choose an amount, and pay the premiums for 20 years (20 annual payments).  Year 21 and beyond, there are no more payments to be made and the policy grows in value.  This is a good option, as once it’s paid up in 20 years, you don’t have to think about it again.  You’ll receive an annual statement during the anniversary month of when you opened it showing the growth and current value of the policy, as well as each January, a statement for taxes showing interest received.

With whichever you choose, and for whatever amount you choose, be sure you pay the premiums in full and before the due date.  If not, the policy will lapse, and you lose the entire thing….. the policy will close with no recourse to get it back.  So be diligent about the payments.

Beneficiaries can be changed at any time, and should be reviewed and updated at any life changes. You should also let your beneficiary(s) know your wishes as to the disposition of your remains.

So often, people don’t want to talk about these things, and so, when needed, no one knows of any policy or any of your wishes. It is why it is so important to have this conversation with those involved in your life.