Your loved ones can use the benefit payout to pay for the whip.
As kids, a lot of people thought a major milestone of their adolescence would be getting their driver’s license. It’s a right of passage for a teenager to have the privilege and the responsibility of having a license and being able to hit the road.
And hit the road they do. According to data from the U.S. Census American Community Survey, over 76% of Americans drive to work solo, while another 9% of commuters carpool to work with someone else. So it’s safe to say that aside from a few major cities that rely on mass transit, most people drive to work. And it’s not just commuting to jobs, people use their cars for everything from road trips to running errands. Cars are a major necessity in the lives of most people.
But let’s say the worst were to happen to you. Your family may still be reliant on that car (or cars) to continue their day-to-day life. Would your family be able to continue to make car payments, cover insurance, gas, and repairs in your absence? If this is something that keeps you up at night, fret not. Having a life insurance plan means your beneficiaries can use the payout to keep that car safely parked in the garage.
- The ins-and-outs of car expenses
- Can life insurance cover car debt?
- What other debts can life insurance cover?
The ins-and-outs of car expenses
We know no one wants to think about paying bills, but it’s part of life for almost everyone. If you’re a car owner or leaser, you know that having a car can accrue a lot of expenses on top of other expenses you may have, like a mortgage, student loans, or credit card debt. The most common costs of car ownership are:
- Monthly car payments
- Gas and tolls
- Routine mechanical checks
- Unscheduled repairs
- Auto insurance
While having auto protection is a given, if you have life insurance it can help protect your assets, including your car (even if you have accrued some debt).
Can life insurance cover car debt?
If you have a car that has accumulated a lot of expenses, will your family have to be responsible for the debt if you die? Yes and no. While the car dealership or insurance company may not come for your loved one’s pockets, if you want them to keep said car they will naturally have to continue on with payments.
This is where the life insurance payout comes in. Should you die, your beneficiaries will be able to use the money as they see fit. This can include not only making car payments and keeping up with the auto insurance but they can even upgrade or trade it in for a brand new car.
What other debts can life insurance cover?
Car payments aren’t the only thing a death payout can cover. As mentioned, while your beneficiaries can use the money how they want, you can suggest that the coverage go towards things that are most important to you.
Protection for them might include not only keeping up with car payments, but also paying the mortgage on your house, covering school loans, child care, or even leaving a legacy in your name. You should also talk to your family about the things they’d want to have covered if you were to die so that you can personalize a policy that’s uniquely yours.