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May 20, 2020

Things to Consider for Caregivers Looking for Life Insurance

caregiver life insurance

The late UCLA head basketball coach, John Wooden, once said, “The most important thing in the world is family and love.” He is not alone in that sentiment. One study found that 69 percent of Americans cite family as what gives the most meaning to life.1

Life insurance may help protect what matters most — your loved ones

Most people would do anything for the care, safety, and well-being of their family, and would not purposely place their loved ones in a position of financial insecurity. Those who purchase life insurance don’t do it for themselves; it’s to help protect their loved ones from the financial uncertainty that could occur when the insured is no longer there.

What does life insurance do for a family?

Life insurance is designed to be an integral block in the foundation of a well-structured, long-term financial plan. It exists to help provide for four basic needs a families typically face upon the death of an income provider. First among these needs a family may face are the final expenses of the deceased, including funeral costs, any lingering medical expenses, and any other debts the deceased may have accrued. The next financial needs the family could confront are the need for income replacement and mortgage protection. Though the need may not be imminent, at some point the family may have to deal with providing for the children’s education.

What if my dependents aren’t children?

A dependent isn’t necessarily a minor child. If a loved one depends on your financial support for their livelihood, it is possible they may be considered dependents. Two common scenarios occur when a family member is caring for aging parents or caring for an adult child with disabilities. These scenarios have different needs than those of providing for the future of young children, but life insurance can still play an important role in helping to provide for their care and wellbeing in the event you die before they do.

About 34.2 million Americans have provided unpaid care to an adult age 50 or older in the last 12 months. Approximately 39.8 million caregivers (16.6 percent of Americans) provide care to adults (aged 18+) with a disability or illness.2 These scenarios are different, of course, but they do share certain concerns in terms of making provisions for these loved ones.

If you pass before your adult dependents, you would likely want to provide for your final expenses, just as you would with a young family. Another consideration would be living arrangements — can your loved ones stay where they are or do other arrangements need to be made? You would also need to find someone else to care for them. You may need to consider designating someone as financial manager for your loved one’s affairs.

Finally, an important caveat: Be sure to check with your tax attorney to determine if someone qualifies as your dependent. These are broad and general considerations when planning for the future of adult dependents. Whether it’s your parents or your adult disabled child, there could be legal and financial concerns that have an effect on the type of care and support you provide. Any provisions you make must protect your loved one’s eligibility for any assistance programs they may depend on. Planning ahead and making sure these concerns are addressed can make it easier for you to do your job as caretaker.3 In addition to legal and financial advice, advocacy groups and programs can sometimes help caretakers navigate the system and help get their loved ones the services they need and may be entitled to. There are also many support groups offering support and encouragement for caretakers.

No one cares more for your loved ones than you do. Life insurance can play an important part in helping to build a secure financial future for them. A licensed insurance professional can help you select the right coverage to help you accomplish this purpose.

  1. Pew Research Center, Where Americans Find Meaning in Life (June 18, 2020)

  2. Family Caregiver Alliance, Caregiver Statistics: Demographics (June 23, 2020)

  3. Better Health While Aging, 9 Types of Issues to Address When Helping Older Parents (June 23, 2020)

Categories: Insurance, Life Insurance, Supplement health insurance

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