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More than half of Americans who own life insurance say they purchased it primarily to cover final
expenses if something happens to them, according to the 2016 Life Insurance Barometer study. Yet one in
four also say they don't think they have enough life insurance - and the mistaken assumption that life insurance is
just for paying final expenses could explain why so many are underinsured.
While survivors certainly can use life insurance benefits to pay final costs, or to help replace lost income, life
insurance proceeds can also fund other important financial objectives. Many of those goals cost far more than
covering end-of-life expenses.
Here are ve nancial goals that life insurance can help fund for your loved ones after you're gone:
Raising children
Raising a child born in 2015 to age 17 will cost a family more than $284,570 for basics like food, shelter and other necessities, according to the
USDA and data from its Consumer Expenditures Survey. That gure does not include college tuition. Costs for special needs children can be
even higher.
"Life is hard enough when you lose someone you care about, and nancial stuff doesn't make it any easier," says Ryan McNany, whose mother,
Mickey, passed away from colon cancer. McNany's daughter, Mary, has Down syndrome, and had a special relationship with her grandmother.
Their story is featured in Prudential Life Insurance's Masterpiece of Love video series.
"Mom didn't have a lot of life insurance, but what a gift to be able to have some insurance to help ease the burden," McNany says. "I'm grateful
that Mom had a little bit."
College education
A four-year college degree can cost more than $100,000 for tuition only, according to data from the National Center for Education Statistics.
Factor in food, books, housing, transportation and other expenses and it's easy to understand why the Institute for College Access and Success
says that seven in 10 college seniors graduate with more than $30,000 in student loan debt.
Life insurance proceeds can help fund college educations, even if college is many years in the future for the child. Beneciaries can invest life
insurance payouts in tax-advantaged college savings accounts to ensure funds will be available when the child is ready for college.
Retirement income
The average cost of retirement is more than $780,000, the Motley Fool reports. Retirees with health issues, disabilities or high standards of
living may need even more. According to the National Council on Aging, money challenges are common among retirees; 2.9 million senior
households suffer from food insecurity, more than a third still owe money on a mortgage, and more than 61 percent have some form of debt.
Life insurance proceeds can pay off mortgages and other commitments to allow senior survivors to live debt-free, and can be invested in tax-
advantaged retirement savings vehicles to help ensure retirement income.