A NerdWallet survey of more than 2,000 couples has revealed that roughly 1 in 3 couples do not have any life insurance at all and 43% of those adult who actually do have some life insurance say they would not be financially prepared or capable if they were to loose their spouse.
And, it also revealed that women would be more financially affected than men…so take note of this, thoughtful husbands out there every where.
Here are 5 things couples can do to be prepared in the event of the loss of a spouse:
1. Have a will
A will is a legal document that outlines and designates who gets specific belongings and assets after you die. It’s a very important document and needs to be kept up to date. You name an executor (aka personal representative to manage your estate) and you can also name a guardian for your children. There is plenty of DIY will kits out there that you can use and frankly, they’re better than not having one in place at all. However, a solicitor can assist you with preparing a will in a little more detail than a DIY will kit will do but in any case, you need to have a will.
2. Work out how much life insurance you need
As I always say, no one is bullet-proof, so don’t take this issue of life insurance for granted. We all die, that’s an indisputable fact!
And it usually happens when you least expect it. Most people just rely on whatever life insurance their employer provides them through their default super fund but this is usually never enough.
And don’t for one minute think that just one of you should have life insurance and not the other, because death doesn’t discriminate.
Both spouses should have life cover, even if one is a stay-at-home parent.
There are a few different ways to work out how much life cover is enough and a professional (Risk) Adviser will be able to guide you in the right direction for this.
3. Understand the details of your spouse’s life insurance policy
Even if one of you is more involved in the day-to-day financial management of the household, the other spouse should have at least a basic understanding of what is what…this should make sense, doesn’t it?
4. Keep your financial records in a secure place where you and your spouse can find them
It’s amazing how many people, or couples just don’t know where their important financial documents are kept or worse still, many people don’t even keep them and end up, for whatever reason, loosing them. It’s hard enough having to deal with the emotions of loosing a loved one and then having to ferret around and find that person’s important financial documents such as a life insurance policy is usually the last thing you want to do. So keep all of your important financial documents in a safe and secure location that both of you know about and are able to get too if a tragedy does happen.
5. Talk with your spouse about each other’s final wishes
The NerdWallet survey also found that a large number of people simply do not know anything about their spouse’s final wishes, including their preferences about burial or cremation or even if they are listed as an organ donor.
Some people have very specific wishes but like a lot of things, we’re afraid to communicate these types of things and talk about them to our spouses.
Especially today with so many blended families it’s so important to get instructions right about our belongings and assets and exactly what we want to happen when we die.
The problem is that most families don’t look into estate documents until after the funeral and conflicts can, and often do arise about what someone thought, or expected would be left to them.
This is a sad and very true fact unfortunately and talking about the end of your own life, or harder still, the end of your spouse’s life may not be a very nice topic of conversation but it’s the responsible thing to do.
This way there is no uncertainty and it’s all about managing expectations at a time that is usually extremely emotional and painful for the surviving family members.
So, even if you consider yourself not to be one of those people who is all that organised, make an effort on this subject for the ones you love.
There are many gifts of love you can give your family and the gift of security is one of the best!
* The author of this article, Gary Fabian is a financial adviser and principal of Precision Advisory and specialises in risk insurance and superannuation.
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