Life insurance might be one of the first expenses you want to save on during a recession. However, it can provide financial security for your dependents in the event you pass away—security they might otherwise not have during challenging economic times. In fact, considering the prevalence of job loss and inflation, having life insurance might even be more important than ever before during a recession.
Life Insurance Protects Your Dependents During a Recession
The purpose of life insurance is to provide your dependents with a death benefit that mitigates the financial impact of your death on their lives. Here’s how it can help.
Pay for Funeral Costs
During a recession, inflation generally skyrockets, which drives up the prices of pretty much everything, including funeral costs. Since funeral costs are on average between $7,000 and $9,000, having a bulk sum payout of a death benefit can certainly take some of the financial pressure off your loved ones’ shoulders.
Pay for Living Expenses
With recession pushing the cost of living up, your dependents need a financial bolster to help them simply pay for groceries, utilities, and other daily living expenses. Your death benefit can provide that extra cushion they need to get through challenging times.
Provide a Safety Net in the Event of Loss of Income
At the same time, layoffs and a constricting job market make it more challenging for people to earn a living. In the event you’re the only income-generating person in the family, your significant other or oldest children might have to earn a living. If they can’t find a job, having a death benefit can provide a safety net they otherwise wouldn’t have to get them through lean times.
The same is true for a working dependent who loses a job during a recession. When it’s challenging to land a new job, they might be underemployed or even unemployed for a while. The death benefit can help bridge them over until they can start earning a living again.
Pay Off Your Debts
If you have debts at the time of your death, your heirs inherit them. This includes everything from credit card debt and mortgages to medical and student debt. It’s almost always a great challenge for loved ones to pay off these debts without having a life insurance policy to fall back on. So if you have any debt at all and want to protect your loved ones from the immense financial burden of paying them off, make sure to get sufficient life insurance coverage.
Life Insurance Always Provides a Safety Net
Generally speaking, there’s more at risk for your dependents in the event you pass away during a recession compared to during an economic upswing. That’s why it’s wise to make sure you purchase life insurance as soon as you have any debt and/or dependents.
At Liberty Financial Group, we can help you find the best life insurance coverage for the right price. Contact us today for a personalized quote.
