When I was young, single and fit as a fiddle I applied for life insurance through my employer. Similar to this article, by all accounts I didn’t need life insurance. I wanted life insurance to leave a legacy, as my plans of being a pop diva never fully materialized and, to this day, no one is willing to put my mug on their tee when I die.
I have three nieces. I thought if I pass away, I had nothing to leave to them or other family or friends. Other than memories – and memories with me are fun – there would be nothing left of me. Poof! An inheritance to my nieces to help pay for college, their first home or to travel the world (my preference) would be a great legacy, I thought.
We often only think of life insurance when we start families as a way to prevent financial insecurity when we did. The possibility of leaving behind a spouse and children to fend for themselves is a reasonable concern to want to address. However, today’s life insurance does so much more – especially if you don’t have the typical nuclear family structure.
Protect Your Future Family
For queer residents of many states, same-sex marriage only became legal a year ago. As this recent Gallup study shows, we’re getting hitched in historic numbers. Many of us are well above the average age than our straight peers for a first marriage. Plus, because having children for same-sex couples is never an oopsy, it can take years to finally start a family.
If queer people wait until we’re settled down or having children to buy life insurance, we could lose the financial benefits of purchasing less expensive life insurance when we’re younger. If you’re queer, young and thinking a spouse and kids are in your tomorrow, your wallet will thank you for purchasing life insurance today.
Protect Your Family From Creditors
Paying off debt is the number two concern of the queer community, and debts don’t disappear when we do. With the escalating costs of college, student loans and other debts, creditors often look to next of kin or co-signer for repayment. So, in addition to your parents or spouse losing you, they may then have to repay your debts. Depending on the size of your debt and their financial situation, your loved ones may or may not be able to repay your loans easily.
When David and I bought our condominium we made sure we each had enough life insurance on the other to pay off our mortgage in case one of us passed away. This gave us the peace of mind that one of us wouldn’t be in financial trouble if we lost the other.
You don’t want to expose your family to this anti-inheritance. First, understand what happens to your debts if you die. And consider looking into million dollar insurance policies to pay your debts if you pass so your friends and families’ last memory of you is you and not your bills.
Life insurance needs aren't one-size-fits-all.Calculate your needs
Leave an Inheritance
If there are one or more people you’d like to leave a gift to should you pass away, life insurance can fund or supplement an inheritance. As I intended with my nieces, you can do likewise. In addition to family, you can leave an inheritance to any relation such as a friend, former partner or foster children.
You may leave this inheritance as a gift for the recipient to spend as they wish or you may outline provisions in your will on how this inheritance should be used. Such provisions may include age of receipt and whether or not the inheritance is earmarked for certain purposes such as paying for college or buying a home. If Leona Helmsley can leave $2 million to her dog for grooming, maintenance and security, you know the restrictions can be numerous – and fun.
Fund Your Favorite Charity or Nonprofit
The queer community is as proud of our causes as we are of our pride. If there are charities or nonprofits you’re passionate about, you may leave a donation, as outlined by your trust, after you’ve passed to help ensure those organizations continue after you’re gone.
You may leave a single donation to one organization or to multiple organizations in your name. If you choose the latter, it’s wise to assign a trustee to your estate to oversee that the donations are distributed appropriately and not a la Evita.
From our market research at Debt Free Guys, the queer community’s number one concern is saving for retirement. As healthcare can take as much as 30% of one’s retirement savings, many in the queer community who haven’t saved need alternatives.
We often assume life insurance only kicks in after we kick the bucket. Some life insurance policies include provisions that allow for tax-free payments to cover medical care in certain “critical” circumstances. One of these features is an accelerated death benefit. If your coverage includes this benefit, which the Haven Term policy does, it allows for you to start borrowing against your life insurance policy death benefit if you are diagnosed with a terminal or life threatening illness. Ultimately, this helps you get your affairs in order and prevents you from potentially leaving your family with hospital expenses to deal with while also emotionally coming to terms with your death.
Protect Your Business
As David and I have learned, starting a business can take years. If you have a new or well established small business and want to ensure it continues long after you do, list your small business or your business partner as a beneficiary of your life insurance – depends on what your policy allows. Whether you’re a younger, older, single or partnered small business owner consider this reason for buying life insurance, especially if your business or business partner(s) rely heavily on you.
As you can see, today’s life insurance is not that of your parent’s life insurance. There are many reasons why young and old, single and married queer people should buy life insurance, not the least of which is to leave a great legacy. And, life insurance is much more affordable than you’d think – often less than your internet bill or even your regular latte habit per month. Find out how much it would cost you.
The most memorable shows end with great encores. Make sure you have one.