by Stephanie Berenbaum – March 31, 2011
Should You Get It & Why
So, you’re a single woman without kids — think you have no need for life insurance? You may want to think again!
Dependents Don’t Just Mean Your Kids
We’ve all seen those commercials which focus on the ‘man of the family’ taking out a life insurance policy to protect his dependents financially in case of his death. But, it got us thinking – what about single women without traditional dependents? Just because you don’t have children doesn’t mean you don’t have financial responsibilities …or a lot of people depending on you!
I started looking around, and it turns out some of the major life insurance players (AXA, New York Life and others) have started marketing to single women without children. So, I wondered, what was this all about — and was it really necessary? Before I was married with kids the thought of getting life insurance had never dawned on me.
I know this is the last thing any of us wants to think about, but it’s usually the things we want to avoid that are the most important to take care of. Let’s just take a quick peek at this enormous topic, and then we can all move about our day and on to more cheerful matters!
Ok, say that sky-diving trip you planned doesn’t work out so well… It’s not like all your debts are forgiven and any money and assets you have goes straight to your family – though many people think this is the case! Apparently, before any beneficiaries get paid, your creditors have a right to your assets to pay off your debts. Think of it this way – if you were gone tomorrow and all your creditors got paid in full out of your assets, would there be anything left over for the people you want to help take care of?
Who Are You Responsible For?
Which brings us back to you. You might not have children, but like many women today you may be in the position of taking care of aging parents – or significantly helping out with nieces or nephews. You may be leaving all you have to your parents or nieces and nephews in your will, but your debts will be taken out of your estate first – potentially turning EVERYTHING into NOTHING. Not to get extra morbid, but your dependents will also be responsible for paying for your funeral…
Benefits & Creditors
We spoke with lawyer Tom Hession to see just how a life insurance policy differs from other assets, as far as creditors going after them to satisfy post-mortem debts. Sure, it’s depressing to think about ‘death benefits’, but it’s important to understand why life insurance money differs from the rest of your ‘estate’, so listen up!
According to Tom, once a person has died, a life insurance policy left to a specific beneficiary cannot be garnished by creditors. In a nutshell – creditors can go after the rest of your assets, but you can still be assured that your parents, niece, or whomever you left as the beneficiary of your life insurance policy will be taken care of. Now things were starting to become clearer to me! And just in the nick of time, because frankly if I write the words “death benefits” one more time, I am going to have to get a cocktail (mind you it’s only 1pm here in L.A.)
Reality Bites, But The Best Deal Makes It Better
One bright side to this downer of a conversation? It is more affordable to buy life insurance when you are young and healthy – so at least there is a Fab & Fru silver lining to looking into all this icky-ness now. A life insurance policy may or may not be appropriate for you, but we do think it is something many women – single women in particular – don’t pay enough attention to. So – at least consider it, do the research and then go check out a website of puppies playing or something along those lines to take your mind off all this!| Print