Life insurance is for more than just burial, cremation, and funeral services

As a licensed life insurance agent for almost 20 years, I can count on one hand the number of times an applicant has requested a quote for life insurance that exceeded the average cost of burial, cremation, and funeral services.

Once I ask a few questions, I quickly determine that the amount of coverage the applicant is requesting is simply not enough for their current lifestyle.

In my opinion, life insurance has four purposes: 1) To cover the cost of your burial, cremation, and/ or funeral services: As of today, the national average for these services range between $5,000 and $10,000.

2) To pay off your debt: You should only focus on your secured debt (home, vehicles, etc.) that you want to leave to your loved ones upon your death. Never focus on your unsecured debt (credit cards, medical bills, personal loans, student loans, etc.). The only exception to this rule is, if the unsecured debt is in you and a joint applicant’s name, treat it as a secured debt. I say that because, due to the unsecured debt being a joint responsibility, the institution or lender will still pursue collection procedures from the living party upon your death. Other than that reason, unsecured debts typically die with you.

3) To provide financial support for those who rely on your income: If you have a spouse, dependent children, etc. that requires your source of income to cover daily and living expenses, their needs do not change upon your death. In most cases, their financial needs increase following the death.

4) To leave an inheritance to your loved ones: Regardless of how much income you make, how much money you have saved, or the size of your investment portfolio, life insurance is a great tool to use in order to pass down wealth to your loved ones and the next generation for many years to come. Out of all four purposes, this is my absolute favorite one!

Outside of yourself and your spouse, you should also have life insurance coverage on your dependent children. Keep in mind, due to them being in a position where they rely on your income and not the opposite, you should only purchase enough coverage on them to cover their burial, cremation, and/or funeral services When purchasing life insurance coverage, you want to always take advantage of the group life insurance on your job. These policies are very inexpensive. Due to the low cost, I recommend you maximize the amount you purchase for yourself, your spouse, and your dependent children.

Be mindful, since the life insurance premiums are are being paid out of your paycheck, you will not have coverage in the event of a involuntarily or voluntarily job loss, if you have to take time off from work due to an illness of yourself or a loved one, or any other reason that would require you not to receive a paycheck for an extended period of time. For those reasons, I highly recommend that in addition to your group life insurance on your job, you should also have a policy through a private life insurance company. Doing SO, guarantees that you are never in a position of not having life insurance coverage in place.

When choosing life insurance coverage through a private company, I only recommend you get term life insurance. Never purchase cash value life insurance policies (universal life, variable life, variable universal life, whole life, etc.). These cash value policies are outrageously expensive and horrible products. In addition, the advertising, benefits, and payout amounts associated with these policies are very misleading.

In addition to cash value life insurance policies, never purchase credit life insurance policies on your debt (credit cards, mortgages, personal loans, etc.). These policies are also outrageously expensive and horrible products. Remember, your debt will already be covered in your “regular” life insurance policy, so there is no need to duplicate coverage. The only exception to this rule is, if you do not currently have life insurance coverage due to being classified as uninsurable because of age, illness, and/or physical condition. In this case, some coverage is better than none, even if it is more expensive.

Some more options for getting life insurance if you are classified as uninsurable is to take advantage of the group life insurance on you or your spouse's job, at your credit union Or bank, or with civic OT professional organizations you may be a part of. These group life insurance options typically do not require you to answer any medical questions or obtain a medical examination.

Having the proper amount of life insurance in place that your loved ones deserve and need is just one way to show them how ‘‘unselfish” you really are. Remember, the opposite of ‘‘unselfish” is ‘‘selfish."’ For a quote on some affordable life insurance for you and your loved ones, call me, Tim C. Lee, at (601) 842-3226. I am a licensed life insurance agent in the states of Louisiana, Mississippi, and Texas.

Tim C. Lee is the CEO & Founder of TCL Financial & Tax Services, andthe host of “The TCL Show” that airs every Monday from 6:00 p.m. to 7:00 p.m. CST on WMPR 90. I FM in Jackson, MS. This is the show that is about “You, Life, and Money.” Got an article idea or a question you would like answered, e-mail Tim at nclee@TCLFinancia

com