The subject of death is a sensitive topic but it is important to be prepared so that your affairs are in order. A will and a life insurance policy are both very important and should be a part of your plan so that when that day comes, your family and loved ones are protected. It is especially important to have a will and a life insurance policy in place if you have a spouse or children because it’s the only way to properly ensure they will be taken care of.
Some people only have a will while others only have life insurance, and the reality is that having just one is not enough. A comprehensive plan requires you to have both, and there are key differences between the two, so you need to understand the details.
Life insurance is a contract between yourself and an insurance company and will provide your family with a lump sum of money if you were to pass away. This contract would ensure that your assigned beneficiary receives a set sum of money in the event of your death, and they would be able to use that money for any purpose. This payment from the insurance company falls outside of the assets covered by your will, so it would not be administered through your estate.
A will, on the other hand, would provide your family and loved ones with a lump sum of money and other assets like property, investments, family heirlooms, and jewelry, for example. A will would allow you to leave a specific amount of money to your loved ones along with any assets you wish to distribute because everything you own can be left to your beneficiaries. One of the most important aspects of a will is your ability to appoint guardians for minor children. Your life insurance policy would help your children financially but would not name someone your children can rely on, so it is crucial to have a will in place if you have children because it is the only way to appoint the guardians that would be responsible for taking care of your children should anything happen to you and your spouse. You would be able to name the people you can count on to take legal, moral, and financial responsibility for your children, so it is crucial to have such a document.
It is recommended that every adult have both a life insurance policy and a will because, together, they create a strong support system for your loved ones during a very difficult time. These documents will allow them to grieve peacefully because your affairs and wishes will be clear, so there will be no room for disagreements or confusion.