La Mort Et Les Impots
Benjamin Franklin once wrote:
“Notre constitution nouvelle est actuellement établie, tout paraît nous prome promettre qu’elle sera durable; mais, dans ce monde, il n’y a rien d’assure que la mort et les impôts.”
I never knew he didn’t actually say it. He wrote it to French scientist Jean-Baptise Leroy in 1789 (about five months before Franklin died) using Leroy’s native tongue. (Learn something new every day!) What that says in English is “Our new Constitution is now established, everything seems to promise it will be durable; but, in this world, nothing is certain except death and taxes.
While I could likely spend numerous posts on taxes, that’s not my area of expertise and will leave that to the accountants and politicians to discuss in detail. Today, I want to focus on one portion of that famous quote: La Mort – Death.
While each of us is destined to die, it is a topic few want to discuss or even think about. I can’t blame them. Who wants to think about their mortality? It’s crucial we do though. Here’s why: We’re all going to die at some point.
According to the Center for Disease Control (CDC), in 2015, the crude mortality rate was 844 per 100,000 people. While the average life expectancy at birth is 78.8 years, age-specific deaths increased year-over-year for each age group from 4-14 all the way through 65-74.
What’s all this mean? We don’t know when we’re going to die, but it could happen. It’s likely that you know of someone both older and younger who have passed away much sooner than they’d expected.
Knowing that death is inevitable, we have a choice to make: plan for it or ignore it.
If we ignore it, we’re putting our family in the precarious position of needing to figure out how to fill not only the emotional void, but also the financial one. If you’re on Facebook, you’ve likely seen the (unfortunately) all-too-familiar funding request posts for someone who died unexpectedly. An already very difficult situation has been exasperated by the need to pay for final expenses or help the family cope financially with the loss.
If we plan for it, we simply take steps to at least cover final expenses (both funeral and any outstanding medical bills) and, if so chosen, provide financial stability for those left behind. That plan can be accomplished through savings or, when appropriate, life insurance. If life insurance is the best way to accomplish it, there are many decisions to be made.
- How much coverage should you have? It really depends. We evaluate needs in a few different ways. The first (and least amount) is covering only final expenses (ranging between $7000-20,000 depending upon what one would like to cover) and total debt. The next amount takes into account the first plus lost income and accomplishing every financial goal that might exist. (This is the highest level of coverage.) The third looks at the first option plus lost income. (This usually falls in the middle.
- What kind of coverage should you have? Once again, it depends. There are multiple coverage options with life insurance. The cheapest is accidental death. This coverage is the cheapest because it covers the least amount. It only covers for, you guessed it, accidental death. Term insurance is a popular option for many due to its low cost. Term insurance coverages you for a set amount of time (5, 10, 20, 30 years) and then, in most cases, expires if you are still alive. Term insurance is popular due to the cost and the ability to protect a loss of income for a substantive timeframe. Permanent insurance is the costliest of the coverage options. It is call permanent because it has the ability to last until you die. (There are quite a few kinds of permanent life insurance options, each with different variables, rules and options that I’m not going to delve into here.)?
In addition to life insurance, it is important to consider having the proper estate documents in place. We recommend speaking with an estate attorney to determine if you should have a will, a trust, a financial power-of-attorney, a healthcare power-of-attorney and any guardianship designations that you might have. Yes, it costs money. No, you shouldn’t put it off or put the burden on the courts to decide what your wishes might have been.
What is best for you to do? Again, each person is different, so the answer is the same as above: it depends. What we all do know, but some are less likely to admit, is that we are all going to die. Ignoring it solves nothing and can actually create more problems that cannot be easily solved once you’re gone. Having a plan in case it does happen, while perhaps unpleasant to think about, can lessen the burden placed on loved ones later.