We all want to leave a legacy after we’re gone, but how do you go about accomplishing such a worthy task? An article in MarketWatch, “5 ways to make a great impression after you’re dead,” says you might be surprised to learn that there’s an easy answer: your life insurance policy.
The payout from a life insurance policy—known as a “death benefit”—can be used to create a legacy. It’s even more than that for someone who wants to leave a legacy to their spouse and children. A life insurance policy can have a direct impact on individual lives, after you’ve passed away.
Immediate family first. The greatest legacy that you have is your family. Life insurance can assist with financial protection for them. If you have family who rely on your income for their day-to-day lives, think of them when deciding on life insurance and the amount of coverage you need. Your legacy can live on through a death benefit that can pay off the family home mortgage, contribute towards college tuition or help start a business. It can ultimately provide income that helps your loved ones continue to meet their financial needs, if you’re no longer around.
Be the “cool” aunt or uncle. Your nieces and nephews may not need a life insurance policy from you to cover their day-to-day financial needs. However, naming your nephew as a beneficiary of your life insurance policy is a gesture that would cement you as the best aunt or uncle ever. There are numerous uses for life insurance that could help your extended family. Be sure to talk to your siblings to make them aware, set expectations and allow them to factor the money into their family’s overall financial plans. A big influx of cash could have an impact on student aid, so it’s an important conversation to have.
Remember a legacy to your favorite charity. Maybe your legacy should be giving back to your favorite charity, like one dedicated to finding a cure for a disease or animal rescue. Life insurance offers the way to help charities after you pass. You can still continue giving back and advocating for what you believe in, after you are gone. Alternatively, you can name a trust as the beneficiary of your life insurance policy and provide the trust with specific instructions to give a certain amount of your estate to the charity when you die. You could also use your life insurance to establish a scholarship at your alma mater. Contact your school’s development or advancement office for assistance.
You can leave an impact on your loved ones and your community that will carry on, long after you’re gone. If you’re interested learning how to use life insurance to create a legacy, speak with an experienced estate planning attorney for help in making the best choices for your situation.
Reference: MarketWatch (May 8, 2017) “5 ways to make a great impression after you’re dead”