Do I Need Life Insurance? Questions To Ask Yourself and Your Family.

From vacations to planning for college, creating life plans with loved ones is one of the many joys in life. But when it comes to more sensitive topics, like unexpected deaths or disability, it can be tempting to avoid conversations altogether.

Initiating a conversation about your family values and goals – and how those goals could be impacted by the loss of a loved one – not only helps you think through key details of your legacy plan but can also provide some comfort for everyone.

Framing Your Conversation: What to Think About on Your Own

Not sure where to start? Self-reflection can be a helpful first step if you aren’t sure where to begin. Before you bring the conversation about life insurance to your loved ones, consider how you want to be present for them now and in the future – then think about how that might look when you're not there or able to engage in the way you hoped. We find it helps to think about your priorities in five categories:

1.   Immediate needs

Think of these as your urgent funds, or the cash your loved ones will need to pay off your debt. This is also the “mourning time” funds, or the means to allow your loved ones to properly grieve without worrying about their expenses. This can also include funeral expenses and other expenses your family may need while handling your affairs.

Questions to ask yourself:

• Who will be handling my affairs? Do I want to have a funeral – what will that involve? What will those expenses be?
• If I were to die tomorrow, how much debt would I be leaving behind? What plans can I put in place to relieve that debt faster now and in the future?
• How long do I want to relieve my family of their financial responsibilities so they can properly grieve (1 month, 3 months, a year)?

2.   Income

Who depends on you for daily income and expenses? Your income is likely tied to your ability to work – so if you die or become unable to work, understanding your family's needs, and how much they rely on your income to meet those needs, is the most fundamental consideration as you calculate your life insurance and disability income insurance options.

Questions to ask yourself:

• How many dependents do I have? (Dependent income is often for immediate family, but you may have other individuals or even organizations that depend on you.)
• How long will my dependents rely on my income after I'm gone?

3.   Education and other life goals

Education can be a complex (and expensive) topic. And it's possible that your plans could look different now than if you were to pass away.

Questions to ask yourself:

• Do I want to pay for my kids' college education?
• Do I want my kids to pay for part of their education? (Maybe you want your kids to pay for part of their education now, but if you pass away, you prefer to relieve them of that burden and pay for their education in full.)
• Do I have other dependents or loved ones with educational or vocational goals I plan to fund (godchildren, nieces and nephews, spouse)?

4.   Legacy

Giving regular gifts to charities, organizations and loved ones may be an essential part of who you are – and you can continue making an impact in people's lives after you're gone.

Questions to ask yourself:

• How much do I give to charities and community organizations now? Do I want that to increase, decrease or stay the same?
• Who would I like to give a lump sum gift to? How often and how much?

5.   Family traditions and life events

How would you like to be present for your family and community on a bigger level? Consider the life events you would want to be present for. Maybe you want to pay for your grandchild's wedding or fund the next family reunion. Or maybe you want to continue giving an annual gift to your nieces and nephews until they graduate. If there are family traditions you'd like to be carried out after you're gone, consider how you may be able to support those traditions moving forward.

Questions to ask yourself:

• What family traditions do I cherish and wish to support in the future?
• Is there anyone I would like to give a personal gift to in the future?
• What life events would I like to fund for my descendants (weddings, baby showers, first homes)?

How to Start the Protection Conversation

Once you've given yourself plenty of time to think through your priorities and plans, bring your loved ones into the conversation. Talking to your family about these topics may be sensitive and uncomfortable, but they are necessary for planning. Make sure you speak with: 

• Your spouse – It may be more helpful to include your spouse in the initial thinking as you consider your priorities and their needs or requests. They may have a perspective you haven't yet considered, as they are also likely to be the most directly impacted by your death or disablement.
• Your family (kids, parents, other dependents) – Bring your family into the conversation to hear their perspectives and share your plans. Even if they don't influence any of the decisions, including them in the conversation can help them better understand your wishes, priorities and plans for caring for them.
• Your financial professional– a financial professional can help you turn your priorities into measurable goals and outcomes – and help you update those goals if your plans change. With the right strategy, you can benefit from your protection plans while you're still alive.

Additional questions to ask the family

These topics can be sensitive for your loved ones. However, with the right prompting, you can ensure you're making financial decisions together that hold true to your family values and goals. When the time is right, use these questions to start an open dialogue:

• How will your family be impacted emotionally by the loss of a loved one or a disabled individual?
• Could your family sustain their quality of life without you/your income?
• What would need to change in the event that you passed or became disabled?
• Would having additional resources like life insurance or disability income insurance help to alleviate the financial and emotional aftermath of the tragedy?
• What do your young adult and adult children have to say about your plans?

These conversations can lead to level of relief and a sense of reassurance that can help you create a real strategy for a crisis. And once you have their input, you can think more clearly about your protection options.

How Much Life Insurance Will You Need?

Understanding how much insurance coverage you need entirely depends on your personal situation. A great start is answering the questions above. You can also do a quick check with our life insurance calculator. Once you think through your priorities and how much it will cost to cover those priorities for years to come, you'll have a better ballpark number for your coverage needs. For maximum security, make sure your benefit covers:

• Payoffs of debt (mortgage, credit cards, loans)
• College costs
• Charitable bequests
• Families core needs

Once these core needs are met, you can invest time in educating family on what they will need to do in this event and begin thinking about how you can support your community.

Ready to clarify your coverage needs? Learn more about life insurance with Thrivent, or connect with a financial advisor in your area to discuss your options.