Life Insurance can ease a Readjustment Period
The readjustment period, in regards to life insurance, is the interval of time immediately following the insured's death. This is the period where income is usually provided at or near the level enjoyed by the family during the insured's lifetime. In the dependency period thereafter, the income drops to a more realistic sustainable level.
Unfortunately, few of us are able to leave an estate, including life insurance that is substantial enough to provide their dependents with an income as large as they enjoyed while they were alive. This means that an adjustment will have to be made in the family's standard of living.
To cushion this economic and emotional shock however, it is may be best to postpone that adjustment for a period following the income provider's death. The length of the period depends largely on the magnitude of the changes that the family will have to make in their standards of living. If the surviving spouse must acquire skills to gain employment, a longer period may be needed. Whatever the duration, the income during this readjustment period should be approximately equivalent to the family's share of the producer's earnings at the time of his or her death.
The emotional and sometimes physiological turmoil following the death of a close family member typically lasts about one to five years. As survivors cope with their emotions, the bereavement and grieving process often distracts them from concentrating on their financial concerns. They may forget to pay important bills, such as premiums on homeowner's and auto insurance that could worsen their financial position. Creditors insisting to be paid immediately can be an additional source of emotional stress at this time. Survivors who are able to show these creditors that adequate life insurance will be available are usually not pressed for collection until proceeds have been received.
Life insurance can be that financial and emotional stress relief that happens all too often at this critical time. You can make a difference in the lives of your loved ones by forecasting potential future crisis’, and purchasing the necessary protection that is essential to their well-being. Don’t let them suffer because you felt you had it all covered.
About the author: Kyle McDonald holds FIC, FICF, FSCP® & CLTC designations. His viewpoint on life insurance is simple, “Anyone with a family must have life insurance. In the end, life insurance is for others you care about, not you.” He is ready to help you and your family get the best option available. Contact Kyle today at 1-800-651-1953 or KMcDonald@Pivot.com.