Having certain end-of-life policies in place, like an up-to-date Will, funeral cover, as well as life insurance, is the best way to give yourself the kind of peace of mind that comes from knowing that your loved ones will be looked after when you pass away. Without these kind of provisions, there are huge financial implications for your family, especially in the case of your early death.  

Given that the cost of living has risen so dramatically in recent years, it makes sense that you don’t want to spend more than you should on things you don’t need, which is why some people opt to take out life insurance and just leave it at that. Others don’t see the point in getting life insurance if they have a Will specifying how their loved ones will be taken care of.  

Unfortunately, these contracts don’t serve as a one-size-fits-all blanket and play distinctive roles in how they support your surviving dependents.  

This is particularly true when it comes to setting up a Will and taking out life insurance.  

Let’s review why you need both a Will and life insurance, working together to support your loved ones in the event of your death.   

The Key Differences Between A Will And Life Insurance 

While life insurance and a Will are both financial products designed to provide financial security, they operate differently. Life insurance typically pays out a specified sum of money upon your death to the beneficiaries you selected when you took out the policy. On the other hand, a Will is a legal document that outlines your intentions for the distribution of your assets and wealth after your death. It ensures that your estate, including your money, property, and possessions, is divided according to your wishes. Additionally, if you have children, a valid Will allows you to designate who will care for them in the event of your death. Make sure to read about the 6 Common Problems For Beneficiaries In Your Will.

Life Insurance Can’t Replace A Will 

The harsh reality is that if you don’t draw up a Will and then pass away intestate (dying without a Will), the Master of the High Court will be charged with sorting out your estate. Essentially, this means that the Court will decide who inherits what, or who is in charge of administering your estate. In this regard, it certainly won’t matter if you have a life insurance policy, because life insurance policy can’t ensure that any of your final wishes will be carried out, like who will be the guardian of your children. It can only pay out the set lump sum to your beneficiary or beneficiaries.  

Get The Best Of Both Worlds 

It makes sense to have a Will drawn up so that you can legally ensure that your assets and liabilities are dealt with when you pass on, prevent any fraud taking place (aunty taking off with the silver and worse), and have the trusted people of your choosing to help raise your kids. Not to mention relieving the tremendous stress and tension on your family by having this dealt with on their behalf. 

The problem is that there can be serious delays in the process of winding up an estate, even if you do have a Will. During these delays, life can be become extremely financially challenging for your loved ones. In this instance, a life insurance policy comes in handy, because the processing of an insurance claim is usually much quicker, resulting in a speedy a cash payout to help your family cope.  

A more worrying scenario is when there is insufficient cash in your estate, preventing your loved ones from accessing your bank account and causing financial and emotional stress as the Master of the High Court or the executor of your Will deals with these problems. 

Without a life insurance policy, your spouse or partner could be forced to sell the family home or car to cover outstanding debts, for example. Instead, they will receive funds from this policy which are independent of the estate, enabling your family to survive on a daily basis and maintain their standard of living. 

Feeling Informed? 

Life is unpredictable, and having both a Will and a life insurance policy in place will ensure that your loved ones are taken care of and that your estate can be administered in a proper and efficient manner.  

If you want to preserve your legacy and look after your loved ones, it’s vital that you get a life insurance policy and have a proper Will drawn up. In fact, you can get started right now by turning to Capital Legacy, trusted legal experts who can draw your Will up at no cost at all – making sure that your exact wishes are fully and accurately drafted into this essential document.