I don’t know about everyone else, but I’m glad to see spring finally make an appearance. These nice days have me itching to get out in my garden, but I am patiently – OK impatiently – waiting until after our final frost. Those of us who grew up in Southwest Missouri know that some things are certain: Taxes, death, and a freak cold snap in April or May. While we can’t control any of these, we can help lessen the impact of one of them on our farms.
It may not be anyone’s favorite topic, but death is an unfortunate certainty of life. While we’re still in the land of the living, there is something we can do to soften the blow on our families, farms, and businesses, and that’s to make an investment in life insurance.
A good friend and personal financial advisor once told me life insurance is not an expense – it’s an investment. It’s peace of mind. It’s knowing your loved ones are cared for when you’re gone and ensuring that life can go on for your family and your businesses when you’re not there to make things happen. It really stuck with me.
Life insurance can be difficult to talk about, but it’s a topic that I address fairly frequently with my customers. Many see life insurance as wasteful because they themselves will never see the benefit of it. Others say it’s too expensive or think the process to obtain a policy is too much of a hassle. But as an investment in the future, it can be pretty useful.
So how much life insurance do you need? The answer is, of course, completely up to you. Some are comfortable with just enough to cover funeral expenses. Or they just want to be able to leave a little something extra for their kids. But what if you are the primary breadwinner of your household? Then it becomes a matter of what would be needed to replace your income and for how long you think your family will need that income stream. Are you the primary caregiver for young children? How much would it cost your partner to hire someone else to help care for those children? The answers will help you arrive at an appropriate policy.
What if you’re a business owner with a debt load? Some banks, and even some loan programs, require a life insurance policy be assigned to the debt as a precaution in case the primary owner passes away suddenly, typically in the amount of the debt. Even if a lender does not require it, the question should be asked, do you want to leave that debt for your family and business to contend with after you’re gone?
Obviously, these questions only scratch the surface. Continued discussion with family, business partners, lenders, and other advisors can help you determine what you truly need. After all, those of us who are helping you along your business journey want to help you ensure that your legacy is protected regardless of what life throws at you.
Jessica Allan is an agricultural lender and commercial relationship manager at Guaranty Bank in Carthage and Neosho, Mo. A resident of Jasper County, she is also involved in raising cattle on her family’s farm in Newton County and is an active alum of the Crowder College Aggie Club. She may be reached at [email protected].
