Things To Think About

What financial documents are critical to help protect my family?

Don't wait until an emergency happens to start getting your affairs in order. Start with these key documents:

1. Will. If you have children, a will is an absolute must. If you and your spouse were both to pass away, this is the document that will say who you want to become their legal guardians. A lawyer can help you draw up your will. Once you have the will, take a look at it every few years and update it whenever there's a significant change in your life, like marriage or divorce, a new child or a change in your preferences.

2. Living Will. A living will can clearly explain to hospital staff what sort of medical treatment you want if you're terminally ill or can't communicate on your own. Say you had a life-threatening health problem and were rushed to the hospital. They may provide you with a form like this to fill out, but if you were unconscious you wouldn't be able to. It's really important to have this document ahead of time.

3. Durable Power of Attorney. This document makes the person named in it your "attorney-in-fact" and gives them permission to make specific legal and financial decisions in your place. Just like with a will, this is an incredibly important document.

4. Emergency Information Sheet. If something happens unexpectedly, this will give the information someone needs to contact your family, find your other key documents, and take care of the things that need to be taken care of. Include names, phone numbers, and addresses of your doctor and your hospital. Label the information sheets clearly.

9 Life Insurance Myths

Let us help you banish 9 myths about life insurance and give you facts that may change your perspective and give you information for protecting your loved ones.

Myth 1: I'm single, or married with no children, so I don't need life insurance.
Fact: Life insurance can help you cover your debts as well as help you provide for your loved ones in the event of death, even for those without children.

If you are in this group, you may carry debts that you prefer were taken care of rather than taken out of assets left to your loved ones. Still, others may use life insurance proceeds to help nieces, nephews, cousins or siblings achieve their financial goals. For a modest premium, life insurance can help to provide for those who are left behind.

Myth 2: I can't afford life insurance.
Fact: Term life insurance, which is life insurance purchased for a period of time, is very affordable for many people. For example, if you are a healthy, non-smoking, 35-year-old female who has a good family health history, you may be able to purchase a policy for less than an evening at the movie theater per month.

Myth 3: I'm a stay-at-home parent. I draw no income. I don't need life insurance.
Fact: If you're a stay-at-home parent, you may not provide an actual paycheck for the household, but you do provide services that would cost tens of thousands of dollars to replace. These include: the cost of day care, a chauffeur or taxi service, a cook and a home cleaning service to name a few. If you have an individual life insurance policy, this may help to ease the burden for the loved ones if you should pass away.

Myth 4: I have a life insurance policy through my job. If I take another job or get laid off, I can take the policy with me.
Fact: Typically, your group life insurance purchased through an employer isn't portable - meaning if you leave your job, you're probably also leaving your life insurance protection behind. However, if you own an individual life insurance policy purchased through an insurance agent or an Allstate personal financial representative, leaving your job will have no effect on your coverage.

Myth 5: My beneficiaries will have to pay income taxes on the proceeds from my life insurance policy.
Fact: Your life insurance death benefits are generally income tax-free; yet very few people know this. Speak with an Allstate personal financial representative to help you sort through the details. We're here to help you figure things out.

Myth 6: If I travel out of the country and something happens to me, I am not covered.
Fact: In the unlikely event you pass away while in a foreign country, the policy would most likely pay out to the beneficiaries. However, many life insurance policies exclude certain countries, such as those currently on the U.S. Department of State's Current Travel Warnings List; so it's important to review your life insurance policy prior to leaving the country.

Myth 7: If I get a term life insurance policy, I can't convert it to permanent or whole life insurance policies.
Fact: It is possible to convert a term life insurance policy into a permanent policy, depending on the policy purchased. However, individuals seeking to do so should expect an increase in premium. In addition, the conversion may have certain limitations or require renewals. Many people like to purchase term insurance, which tends to be less expensive, while they're younger because it may make obtaining a preferred premium easier when they attempt to convert later.

Myth 8: I don't need life insurance once my children are adults.
Fact: Life insurance can help achieve a goal of leaving an inheritance to children, other loved ones, or help relieve the burden of paying for final costs such as a funeral or final medical bills.

Myth 9: I have a comfortable savings, so I don't need life insurance.
Fact: It is easy to underestimate the amount of savings that is required in the event of death. Most Americans do not have enough in their personal savings to cover these expenses. If you don't have enough saved, it is possible your loved ones won't be able to pay off final expenses or be able to hold onto assets like a home.

When to Adjust Your Life Insurance Policy

A good rule of thumb is to recalculate your life insurance needs once a year, or more often if there's a major change in your life. Take another look at your policy when you buy or sell a home.