Ep. 181 - THE LIVING LEGACY - SECURE YOUR FAMILY’S FUTURE WITH LIFE INSURANCE

In this episode of the Merging Life and Money Show, I dive into how life insurance can transform your family’s financial future. I explore how life insurance can be a tool for building generational wealth, empowering women financially, and ensuring fairness in blended families. With real-life stories, I show how life insurance can help break the cycle of poverty, support your loved ones, and even make a positive impact in your community. 

 Tune in to learn how to discover how to make life insurance part of your legacy plan and download the free Living Legacy Guide for practical steps to get started.

🕒KEY MOMENTS IN THIS EPISODE 

 00:37 The Power of Life Insurance: Beyond Basics

02:18 Breaking the Cycle of Poverty

06:25 Empowering Women with Life Insurance

13:12 Life Insurance in Blended Families

16:58 Life Insurance for Single and Stay-at-Home Parents

19:26 Teaching Financial Responsibility

21:04 Life Insurance as a Tool for Social Change

33:26 Legacy Planning and Final Thoughts

35:50 Key Takeaways and Conclusion

 📥Don't forget to download your free copy of the ‘Living Legacy Guide: https://mariejocaesar.com/living-legacy-guide   

🔑 Key Topics Discussed:

 📝 Life Insurance for Legacy Building
Explore how life insurance can help you build a living legacy that lasts for generations.

 📝 Empowering Women Financially
Learn how life insurance can empower women to overcome financial challenges and secure their family’s future.

 📝 Supporting Blended Families
Discover how life insurance can ensure fairness and financial security for all members of blended families.

 📝 Building Generational Wealth

Uncover how life insurance can be used as a tool to create opportunities and wealth for future generations.

 📝 Overcoming Financial Barriers
Hear stories of how life insurance can help families overcome financial barriers and build resilience.

Chapters

• 2:18 Breaking the Cycle of Poverty
• 6:25 Empowering Women with Life Insurance
• 13:12 Life Insurance for Blended Families
• 16:58 Life Insurance for Single and Stay-at-Home Parents
• 19:26 Teaching Financial Responsibility
• 21:04 Life Insurance as a Tool for Social Change
• 33:26 Legacy Planning with Life Insurance

Transcript

Ep. 181 - THE LIVING LEGACY - SECURE YOUR FAMILY’S FUTURE WITH LIFE INSURANCE

Hello and welcome. What if your life insurance policy could leave a message for your great-grandchildren? What would it say? What dreams would it share? Would it talk about your hopes for them? Or the values you wanted to pass down through generations? 

Today, as we close out our Life Insurance Awareness Month series, we are diving into a topic that goes beyond the typical uses of life insurance. We are exploring how life insurance is not just a safety net. It is a way to build a living legacy that can impact your family for years to come.

For those of you who do not know me, I am your host, Marie-Jo Caesar. I am a financial wellness strategist, and my mission is to help you take control of your finances from the inside out.

Throughout these months, we've been talking all about life insurance. We've covered the basics and explored some advanced stuff. And now, we are going to zoom out and look at the big picture. We will be looking at how this financial tool can transform your family's future, especially when it comes to social change and family empowerment.

So what is the deal with life insurance anyway? At its core, life insurance is like a promise you make to the people you love. It's a way of saying that even if I'm not around anymore, I still want to take care of you. That is kind of what life insurance does. Now let's break it down and see how life insurance can do some pretty amazing things.

Welcome to the Merging Life and Money Show. 

Let's start with how life insurance can break the cycle of poverty.

For families who have had a tough time financially, life insurance can be a real game changer. It's like giving your kids and grandkids a boost up the ladder of success.

 Here is a real-life example. Meet Maria. She was the first person in her family to go to college. Her parents did not have much money, but they were smart and got a life insurance policy. When Maria's dad passed away during her second year of college, the money from the policy helped pay for her tuition. Because of that, Maria was able to focus on her studies instead of worrying about how to pay for school. She graduated without a ton of debt and was even able to help her younger brothers and sisters go to college as well.

This story shows how life insurance can be like a bridge helping families overcome money problems that might have lasted for generations. It's not just about replacing lost income. It's about preserving opportunities and dreams that might otherwise be lost. 

Now, let's zoom out a bit and look at the bigger picture. In many communities, especially those that have been historically underserved, financial resilience is super important. Financial resilience is just a fancy way of saying a family's ability to bounce back from money troubles, like losing a job or dealing with a big medical bill.

Life insurance plays a big role in building this resilience. It's like having a safety net that catches you if you fall. Recent studies show that in some communities, nearly half of families would feel the pinch within six months if they lost their main breadwinner. That is where life insurance comes in. It provides a cushion to help families weather the storm.

But it's not just about getting through tough times. Life insurance can also be a way to build wealth over time. In communities where building generational wealth has been a challenge, life insurance can be a powerful tool. The money from a policy can be used for all sorts of things, paying for education, starting a business, or investing in property. These are all stepping stones to long-term financial stability and growth.

Think about it this way. When families are financially secure, they are more likely to invest in their local communities. They might start businesses that create jobs. They might have more money to spend at local shops. All of this can lead to stronger and more vibrant neighborhoods.

However, there's a substantial gap in life insurance coverage among the different demographic groups. According to the 2021 Insurance Barometer Study by LIMRA and Life Happens, 56 % of Black Americans have life insurance compared to 52%. of the general population. While this shows progress, there is still work to be done to ensure equitable access to this financial tool.

That is why it is so important to spread the word about how life insurance can help families and communities.

Now it's time to talk about how life insurance can be especially powerful for women. Did you know that women often have less life insurance than men?

A 2023 study by LIMRA found that 49 % of women own a life insurance policy compared to 55 % of men.

Some research suggests the gap may be even wider, with one study indicating only 37 % of women have life insurance policies compared to 50 % of men. 

While the exact percentages vary slightly between studies the consistent finding is that women are less likely to have life insurance coverage than men, with a gap of around six to 11 %age points. This gender disparity in life insurance ownership persists despite data showing that women place equal financial value on their lives compared to men. It reflects broader societal trends where women face distinct financial challenges. That is not right, especially since women often face unique money challenges. 

For starters, women usually earn less than men over their lifetime. It is called the wage gap. And it is a real problem. On average, women earn about 82 to 84 cents for every dollar men earn. This gap has remained relatively stable over the past two decades, showing only modest improvements since 2002, when women earned 80 cents on the dollar compared to men. This might not sound like a lot, but over a 40-year career, it adds up to more than $400,000. That is a lot of money that could have gone into savings, investment, or just making life a little easier. 

But the challenges don't stop there. Women are more likely to take time off to care for kids or other family members. This can lead to gaps in their work history, which can affect their earnings and their retirement savings. And speaking of retirement, women generally live longer than men, which means they need more money to cover their expenses, in their later years.

So, how can life insurance help? In a lot of ways, actually, it can replace lost income. If something happens to a woman who is supporting her family, life insurance can make sure her loved ones are still taken care of financially. This is super important for single moms or women who are the main breadwinners in their families.

Life insurance can also provide a safety net during career breaks. Say a woman takes a few years off to raise her kids. During that time, she's not earning a salary or contributing to a retirement account. A life insurance policy with a cash value component can act like a savings account, growing over time and providing a financial cushion if needed.

For women nearing retirement, certain types of life insurance policies can help supplement their income. These policies allow women to draw from the cash value to cover expenses during their golden years. It's like having an extra piggy bank to tap into when you need it.

Here's another real-life example. Remember Maria, our college graduate?  Fast forward a few years, and now she is a successful restaurant owner. As a single mom, She built her business from scratch, pouring her heart and soul into creating a thriving establishment. But she worried about what would happen to her restaurant and her employees if something were to happen to her.

After talking to a financial advisor, Maria invested in a comprehensive life insurance policy that included something called key person coverage, which, by the way, I covered last week. This decision turned out to be super smart when Maria was in a bad car accident that left her unable to work for several months. The money from her policy helped cover her personal expenses and kept the restaurant running while she recovered. Plus, knowing she had the safety net allowed Maria to focus on getting better without stressing about money. 

This story shows how life insurance can be particularly empowering for women entrepreneurs. It provides a safety net that allows them to take risks and chase their business dreams with confidence. 

But here's the thing. Many women either don't realize they need life insurance or they underestimate how much coverage they need. That's why education is so important. We need to make sure women understand their options and how life insurance can fit into the overall financial plan. For instance, many women might not know that term life insurance can be pretty affordable, especially when you are young and healthy. A 30-year-old woman in good health might be able to get a 20-year, $500,000 policy for less than $30 a month. That's less than a dollar a day for a lot of peace of mind. 

It is also worth noting that women often take the lead when it comes to managing their family finances. A recent study found that more than two-thirds of women say they are the CFO of their household, right? They are the chief financial officer of their household. This puts women in a great position to take charge of their family's life insurance planning, making sure everyone is protected. 

Okay. Now we are going to dive into how life insurance can help in blended families. Families come in all shapes and sizes these days, right? When parents remarry and bring kids from previous relationships, things can get a bit complicated, especially when it comes to money. This is where life insurance can really shine. 

In a blended family, that is a family formed by remarriage or new partnerships with children from previous relationships. There are often a lot of different needs to balance. Maybe you want to make sure your biological kids are taken care of, but you also want to provide for your new spouse. Or perhaps you have stepchildren that you want to include in your financial planning. Life insurance can help make sure everyone is treated fairly.

Here's how it might work. Say you are part of a blended family. You could set up two different life insurance policies. One that names your biological children as beneficiaries and another that names your new spouse. This way, you are making sure that both your kids and your partner are provided for without one taking away from the other. 

Life insurance can also help with some of the unique challenges blended families face. For example, If you are paying child support or alimony to an ex-spouse, a life insurance policy can ensure that those payments continue even if something happens to you. This can provide a lot of peace of mind for everyone involved. 

An additional benefit of using life insurance in blended families is that it can actually help bring people closer together. When everyone knows they are being looked after, it is easier to focus on being a family, instead of worrying about money or feeling left out.

Here's an example. Meet the Patel Smiths, a blended family. When Anita Patel and John Smith got married, Anita had two young kids from a previous marriage, and John had a teenage daughter. At first, they focused their life insurance on providing for the younger kids' future, but after Joan's daughter started college and Anita's kids became teenagers, they realized they needed to change things up.

So they sat down with a financial advisor and adjusted their policies. They made sure there was enough coverage to help with college costs for all the kids. Okay. They also added coverage when they had a child together, making sure that all the children, regardless of their biological relationship, were equally provided for.

The neat thing is that this process of figuring out their life insurance actually brought the family closer together. It opened up conversations about their hopes and dreams for the future and helped everyone feel valued and included. But blended families are not the only ones who can benefit from careful life insurance planning. Single parents can also find life insurance to be a significant tool in their financial toolkit. 

For single parents, life insurance is super important. If you are raising kids on your own, you are probably the main or only source of financial support for your family. A life insurance policy can make sure your kids are taken care of if anything happens to you. It can cover things like daily living expenses, education costs, and even future needs like helping with a down payment on a house. 

Take Emma, for example. She's a single mom with two kids. She doesn't make a ton of money, but she knows how important it is to have life insurance. She got a term life insurance policy that would cover her kids' living expenses and education costs if anything were to happen to her. It's not a huge policy, but it gives her peace of mind knowing her kids would be okay financially. 

Now it's time to talk about something that often gets overlooked. The importance of life insurance for stay-at-home parents. Just because someone doesn't bring home a paycheck doesn't mean their contribution is invaluable. Stay-at-home parents do a ton of work. Childcare, cooking, cleaning, managing the household, amongst other things. If something were to happen to them, it would cost a lot of money to replace all those services.

That's why it is a good idea for stay-at-home parents to have life insurance as well. If anything were to happen to them, the working parent would have the financial resources to hire help with child care and household management, allowing them to keep working and maintaining the family's standard of living.

Okay. So, we've talked about how life insurance can help the cycle of poverty, empower women, and make things fair in blended families. But there's another important aspect we need to discuss how life insurance can be a tool for teaching financial responsibility. 

Think about it. When you get a life insurance policy, you are planning for the future. You are thinking about what your family might need down the road. This long-term thinking is a valuable skill to pass on to your kids. 

Some types of life insurance policies, like whole life insurance, build up cash value over time. This can be a great way to teach kids about how money can grow when you save it for a long time. You could even involve your kids or stepkids in discussions about the policy, explaining how it works and why it is important. 

The Rodriguez Chen family did just that. Maria Rodriguez and Wei Chen, both divorced with kids from previous marriages, used their whole life insurance policy as teaching tools. They talked to all their kids about how the policies worked, showing them how the cash value grew over time. They explained how this money could be used for things like education or emergencies in the future. Not only did this help bring the family together around a common goal, but it also taught the kids valuable lessons about planning for the future.

Now, let's zoom out again and look at the big picture. Life insurance is not just about individual families. It can actually be a force for social change. How? Well, when more families have financial security, entire communities can benefit. 

Think about it this way. When a family has life insurance, they are less likely to fall into poverty if they lose a breadwinner. This means they are more likely to be able to keep their kids in the same school, maintain their homes, and continue being active members of their community. Over time, this can lead to more stable neighborhoods, better-funded schools because the local tax base remains strong, and more opportunities for everyone. It's like a ripple effect. The financial security of one family can spread out to benefit many others. 

But here's the thing: for life insurance to have this kind of positive impact, people need to know about it and have access to it. That is why education is so important. Many people, especially in underserved communities, might not know the benefits of life insurance. Or might think it's too expensive. 

That is where a financial professional comes in. We have a responsibility to reach out to all communities to explain how life insurance works and to help people find policies that fit their needs and budget. Some insurance companies are already taking steps to make their products more accessible, like offering policies with lower coverage amounts or flexible payment options. 

It is also important to address some common misconceptions about life insurance. For example, many people think it's only for older folks or that it's too expensive. But the truth is life insurance can be valuable for people of all ages. And there are many affordable options out there. Young adults, for instance, as I mentioned earlier, can benefit from getting life insurance early. Not only are the premiums usually lower when you are young and healthy, but you are locking in your insurability. This means that even if you develop a health problem later, you have already gotten your life insurance in place. Another misconception is that you don't need life insurance if you don't have kids. But life insurance can be valuable, even if you are not a parent; it can help pay off debts so they are not passed on to family members, cover funeral expenses, or leave a legacy for a cause you care about. 

Speaking of leaving a legacy, it is worth discussing how life insurance can help you support causes you care dearly about. Some people use life insurance as a way to make a larger charitable gift than they could during their lifetime. You could name a charity as a beneficiary on your policy. creating a lasting legacy of support for a cause close to your heart. 

For example, let's say you are really passionate about education. You could set up a life insurance policy that would provide a significant donation to your local school district or to a scholarship fund after you are gone. This way, you are not just providing for your family; you are also making a positive impact. on your community for years to come. 

I know we covered a lot of ground here. We've talked about how life insurance can break the cycle of poverty, empower women, bring fairness to blended families, teach financial responsibility, and even drive social change. It is a lot to take in. 

But here are the most important things to remember. Life insurance is more than just a financial product. It is a way to show love and care for your family that lasts long after you are gone. It is like planting a tree. You might not be around to enjoy the shade. But you are making the world better for those who come after you. 

Life insurance is a tool that allows you to extend your influence beyond your lifetime. It's a way to ensure that the progress you've made does not end with you but continues to benefit future generations. Whether you are a young professional, just starting out, a parent planning for their children's future, or someone looking to leave a meaningful legacy, life insurance can help you write a story of hope, resilience, and empowerment for those who will carry on after you. 

As we wrap up our chat about life insurance, I want you to think about your own situation. Do you have life insurance? If not, maybe it's time to look into it. If you do have a policy, when was the last time you checked to make sure it still fits your needs? Remember, as your life changes, maybe you get married, have kids, buy a home, or start a business, your life insurance needs might change as well. 

Don't worry if you are feeling a bit overwhelmed. Okay. Don't worry. It is normal to have questions or feel unsure about where to start. That is why it is a good idea to talk to a financial professional who can help you understand your options. and find a policy that fits your needs and budget. In fact, to get you started, I've put together something called the Living Legacy Guide. It is a free resource that can help you think through how life insurance might fit into your overall financial plan. It will walk you through some questions to consider and give you a framework for thinking about your long-term financial goals.

Remember, life insurance is not just for old people or rich people. It's for anyone who wants to make sure their loved ones are taken care of no matter what happens. It's for anyone who wants to leave the world a little better than they found it. 

As the author Mitch Albom wrote, "All endings are also beginnings. We just don't know it at the time". Life insurance embodies this idea perfectly. What might seem like an ending, the end of life can actually be the beginning of new opportunities, dreams fulfilled, and lives transformed for those who come after us.

So as we close out this life insurance awareness month, I encourage you to take action. If you don't have life insurance, start exploring your options. If you do have a policy, take some time to review it and make sure it still meets your needs. And don't be afraid to ask questions. That is how we learn and grow. 

Now, let's talk a bit more about how life insurance fits into the bigger picture of financial planning. You see, life insurance is not just a standalone thing. It's part of a larger strategy to secure your financial future and that of your loved ones. Think of it like building a house. Your income is like the foundation. It's what everything else is built on. Your savings and investments are like the walls and roof; they protect you from financial storms. And life insurance. Well, that's like a safety net around the whole house. It's there to catch you or your family if something unexpected happens. 

What's interesting is that some type of life insurance can do double duty. We talked earlier about policies and building cash value over time. This can be like a secret room in your financial house. 

For example, say you have a whole life insurance policy that you've had for 20 years. Over that time, it has built up a decent amount of cash value. Now your kid is heading off to college and you need some extra money to help with tuition. Depending on your policy, you might be able to borrow against that cash value to help pay for college. It's like your past self is helping out your future self.

Of course, it's important to understand the ins and outs of how this works before you do it. That's why it is always a good idea to talk to a financial professional who can explain all the details and help you make the best decision for your situation. 

Now, let's circle back to something we touched on earlier: the idea of financial resilience without getting knocked down. Life insurance plays a big role in building that resilience. It's like having a financial shock absorber. If something happens to the family breadwinner, life insurance can help keep the family afloat financially. This means that kids can stay in their schools, family can keep their homes, and people have time to adjust to their new situation without immediately facing financial hardship. It's not just about worst-case scenarios. Okay. Knowing you have the safety net in place can give you the confidence to take positive risks in other areas of your life. Maybe you feel more comfortable starting that business you've always dreamed of or going back to school to change careers. When you know your family will be okay financially, no matter what, it can free you up to pursue your dreams and goals. 

It is worth talking for a minute about how life insurance fits in different stages of life. When you are young and just starting out a simple term life insurance policy might be all you need. It's usually pretty affordable and can provide a good amount of coverage to protect your growing family. 

As you get older and your financial situation becomes more complex, you might want to look into different types of policies. Maybe you want something that builds cash value over time or a policy that can help with estate planning. And what's nifty is that life insurance can adapt to your changing needs throughout your life. 

Speaking of changing needs, let's chat about how life insurance can help with something called legacy planning. This is just a fancy way of talking about how you want to be remembered and what you want to leave behind for future generations. 

For some people, this might mean leaving money to their kids and grandkids. For others, it might mean supporting a cause they care about. Life insurance can help with both of those goals. You could set up a policy that pays out to your family, or you could name a charity as a beneficiary. Some people even do both, leaving some money to family and some to charity. 

Here's a great example. There was a teacher named Mr. Johnson who was really passionate about education. He didn't make a ton of money during his lifetime, but he had a life insurance policy. When he passed away, the policy paid out a significant amount to a scholarship fund he had set up. Now, years after his death, kids in his community are still benefiting from his generosity. That's the power of using life insurance for legacy planning. 

Now, again, I know we've covered a lot of ground here, and some of it might seem a bit complicated. That's okay. The important thing is to start thinking about these issues and asking questions. Remember, there is no one-size-fits-all solution when it comes to life insurance. What works for you, for your neighbor, or for your cousin might not be the best fit for you. 

That's why it's so important to work with a financial professional who can help you understand your options and make the best choice for your situation. They can help you figure out how much coverage you need, what type of policy might be best for you, and how life insurance fits into your overall financial plan. 

As we wrap up, I want to leave you with a few key takeaways. 

One, life insurance is for everyone, not just older folks or rich people. If you have people who depend on you financially, you probably need life insurance. 

Two, life insurance can do more than just pay out when someone dies. Some policies build cash value over time, which can be a useful financial tool. 

Three, the right life insurance policy can help build resilience, create opportunities for your family, and even leave a lasting legacy.

Fourth, as your life changes, Your life insurance needs might change, too. It's a good idea to review your coverage regularly. 

Five, don't be afraid to ask questions. Okay. And seek help from a financial professional. They can help you navigate the world of life insurance and find the best solution for you.

Remember, taking care of your financial future is one of the most loving things you can do for your family. It's about more than money. It's about providing security, opportunities, and peace of mind. I hope this discussion has helped you see life insurance in a new light. It is not just a dry, boring financial product. It is a powerful tool that can help shape the future for you and your loved ones. Thank you for sticking with me for this deep dive into life insurance this month of September. I know it's a lot to take in, but I hope you found it helpful and maybe even a little bit interesting. Remember, it's never too early or too late to start thinking about your financial future.

Take that first step today, whether it's downloading my living legacy guide from our website, talking to a financial professional, or just having a conversation with your family about long-term financial goals. I am your host, Marie-Jo Caesar, and this has been the Merging Life and Money Show. I will be back again next week. Until then, continue merging life and money. Bye for now.