Do you also need a will if you have life insurance? And if so, why? The simple truth is, they both serve essential purposes in the event something happens to you.
First things first, let’s get on the same page and review some quick descriptions of life insurance and wills.
Life Insurance
As you probably already know, life insurance is an agreement between you and an insurance provider that makes sure an insurance beneficiary receives a predetermined sum of money in the case of your passing during an agreed upon time period. The insured person determines the beneficiary when they take out the policy.
Last Will and Testament
A last will and testament is a legal document people use to ensure his or her final wishes are realized, in regard to the distribution of their assets, possessions, and custody of dependents. Every will has a designated beneficiary, or beneficiaries, and it specifies the end-of-life instructions of the deceased. The validity of a will depends on the signer being of “sound mind and mentally capable.” The signing of a will is typically witnessed by two or more unrelated people over the age of 18. Some of the items a will provides distribution instructions for include:
- Property or real estate
- Collectible or valuable possessions
- Automobiles
- Money
Does a Will Impact Life Insurance and Vice Versa?
The simple answer is…it can. But it depends on how or if a beneficiary was named on the policy. It’s important to remember that something like life insurance for seniors is a policy and the payout doesn’t come from the insured’s estate or bank account. If the named life insurance beneficiary is still living, that person receives the payout from the policy.
It should be noted that a life insurance policy can also be paid out to the deceased’s estate and be distributed according to the will.
Why Both Are Important
When you take a good look at life insurance and a will, you can see that each serves a necessary, but different role. Life insurance is about income replacement that helps protect the financial future of someone you care about, and a will is about distributing your property and possessions to the people and/or organizations that you care for now.
Having both life insurance and a will, while different, ultimately combine to provide a compassionate and caring last gesture on your part for those you care about most.
Not sure where to find the great life insurance for seniors or have further questions? Talk to an Americo Senior Life representative today or review our FAQ page. With whole life insurance coverage that never expires, our policies are designed to be the safety net you need at a cost you can afford. Contact us today to get started!