Preparing for Untimely Death Should Be Part of a Solid Financial Plan
It’s expensive to die
The loss of a loved one is hard. But it’s harder to grieve and think of funeral expenses at the same time. You wouldn’t want your loved ones to suffer for your loss and be tortured on where to get the money for your burial.
Call me morbid, but it’s the reality of life. No one can predict when we are going to join our creator. It may happen 10 years from now or tomorrow. No one knows. But it’s sure to happen. So better to prepare and live longer than unprepared and make your loved ones suffer double.
The question is, are you financially prepared?
The average funeral expenses in the US cost $7,000 to $12,000. In the Philippines, where I live, the average figure for simple burial is around $3,000.00 (Php 150,000.00). Do you have that in your account?
For us, preparing for untimely death was my first step when I started to build my financial nest. Why? Because our kids are very young at that time. We wanted to secure their education and daily expenses. We wouldn’t want them to become burdens to my parents or my siblings in case something happens to us.
Here are our “preparing for death investments”:
- Insurance
When my husband and I are still starting, and we have smaller salaries, we got term insurance. It’s cheaper and what we can afford. When our earnings increased, we got ourselves a Variable Life Insurance (VUL) which has insurance and an investment part.
With VUL, a part of our premium goes to insurance, and we opted that the investment portion goes to equity funds. Now, our 10-year VUL plans are all paid up. We are protected, and at the same time, our equity investment continues to grow and is also available for us to withdraw at any time.
We also note that our insurance can be used to pay estate taxes should we live healthy to the point that our kids won’t be needing the “replace lost income” purpose of the insurance.
2. Memorial Life Plans
We bought memorial life plans from a pre-need death care company to handle all funeral preparations and burial services. In the Philippines, it is usually payable in 5 years. It also comes with insurance; that is, in the event of our death within the paying period, our kids will receive cash equal to the plan contract price. The plan will also be considered paid and ready to use.
In case we are still healthy on the 15th year from the plan purchase, we will receive a yearly 20% of the contract price until the 20th year. With that “return of investment,” our plan becomes free.
Why did we get this service? So in case of our demise, our loved ones will simply call the insurance company, and everything will be handled by them. Less stress for whoever we leave behind.
3. Memorial Lot
Memorial lots are double in price when you buy it “at need.” Hence, buying it early has been part of our plan. We got a memorial lot called a “family lot” that can accommodate 16 persons. We wanted to stay at the same place even at the time of death.
I didn’t know that memorial lots also come with a “title.” I considered it merely a thing. But it’s also real estate. Its price goes up year by year. Our fully paid memorial lot is now twice in value. I have included it in our list of assets.
It’s hard to prepare for the unknown. But isn’t it exactly what we are doing when we save and invest? We don’t know what will happen tomorrow, but we still save. We know that we only live once, and we are supposed to enjoy it, but why do we have something called “delayed gratification”?
We restrict ourselves; we spend less, save, and invest for a better tomorrow. That’s hope. We hope to still wake up every day and spend more time with our loved ones. For the financially wise, everything is covered, whether tomorrow we wake up or the possibility that a day may be the last.
I’m not morbid. I’m only 40 but financially savvy.
This post was inspired by a story about the importance of insurance from my Medium friend ABINAS JAGERNAUTH. You can read the story below:
This article is for informational and entertainment purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any significant financial decisions.
