You work hard to care for and protect your loved ones. Legacy planning with life insurance helps you care for them, even after you’re gone.
A legacy is something that’s passed on from generation to generation and an enduring impact on your loved ones that lasts beyond your lifetime. There are many ways to leave a personal legacy, from sharing your famous lasagna recipe to passing on treasured memories or heirlooms.
One of the most powerful ways to show your love and support for your family is by leaving a financial legacy. And you don’t need millions to do it. Here’s what to know about leaving a legacy for your family.
What is legacy planning?
To leave a financial legacy, you need a plan to build wealth and to determine who will receive it when the time comes. That’s why legacy planning is an important part of your overall financial and retirement planning. Creating a plan now, either on your own or with a financial professional, can help ensure security for your loved ones in the years to come.
Your legacy might include savings, investments, property, or even a business that you plan to pass onto your partner and kids. This is money your family can use to pay expenses, cover debts, save for the future, pay for college, take a trip, and more.
It’s essential to create a will, which determines who will receive specific assets that you leave behind. This legal document lays out your final wishes and leaves instructions on how to distribute your property after you die. Your will can cover things like whom you want to receive your personal items and money, how to pay remaining expenses, and who should care for any minor children. When you die, your will specifies how you want your assets distributed to the people or organizations you’ve named in your will.
You should keep in mind that not all assets are covered by a will, however, including life insurance. A life insurance policy is separate from your will and can help provide your family with a substantial legacy after your lifetime.
Is life insurance good for legacy planning?
With life insurance, you buy a certain coverage amount, and your beneficiary receives the life insurance payout, or death benefits, after you die. Many people choose life insurance as a way to pass on a legacy for a few reasons:
- Since you’ve already paid the premiums with your own after-tax earnings, your beneficiaries don’t need to pay taxes on the death benefit in most cases.
- The life insurance payout goes directly to your beneficiary. This means that you don’t have to worry about your debts eating into the life insurance payout and decreasing the amount of money that your family was counting on to pay for end-of-life expenses and regular bills.
- You pay a little, and your family gets a lot. It can be difficult to build enough wealth to ensure your family’s security. Life insurance allows you to pay a little each month in exchange for a more substantial payout later.
If you’re planning to use life insurance to leave a legacy, permanent life insurance is the way to go. Permanent life insurance is more expensive than term life insurance, but it guarantees a payout for your family if you are buying for legacy reasons. There are different Fidelity Life insurance options if you’re looking for lifelong life insurance coverage, including:
- RAPIDecision Senior Whole Life. Designed for adults aged 50 to 85, RAPIDecision® Senior Whole Life offers life insurance coverage ranging from $10,000 to $150,000. You don’t need to take a medical exam, and you have guaranteed level premiums for the life of your insurance policy. This is a great option for people who want permanent life insurance that pays out for any cause. You can use it to cover end-of-life expenses or to pass on money to your kids or grandkids.
- Final expense insurance. Designed for people 50 and up, final expense insurance is another great option that provides support to your family immediately after your death. This type of life insurance provides coverage ranging from $5,000 to $35,000 and helps your family cover medical bills, burial costs, outstanding debt, end of life care, or whatever else they choose. It’s easy to qualify for final expense insurance, and the low coverage amounts make it affordable.
Still have questions about leaving a financial legacy?
We’re here to help. Fidelity Life offers a wide variety of products to support people at every stage of life. Get in touch with one of our agents or start your online quote today.
At Fidelity Life, our goal is to make life insurance simple, affordable, and understandable for everyday families. This content is intended for educational purposes only. Each post is carefully fact-checked, reviewed, and updated regularly to ensure the information is as relevant as possible.