How to talk about life insurance with your loved ones

It's not easy to face our own mortality — much less talk about it. But don't shy away from a life insurance conversation because you think it has to be morbid. Looking at life insurance through a financial planning or goal-setting lens can shed some positive light on the conversation.

And here's an unseen benefit: Life insurance conversations don't have to be ongoing events. Once you get your policies in place, the yearly process of reviewing your needs is quick and painless.

Why talk about life insurance?

Whether you're married, have children or are single with loved ones who count on you, it's important to consider all of your needs and plans to figure out the right amount of coverage.

Talking about life insurance with loved ones is important for several reasons:

1. Life insurance is a core element of financial planning. It provides protection to your loved ones in the case of an unexpected death. Its death benefit can help pay outstanding debts, can serve as income replacement, and will cover final expenses. The payout from life insurance can even help your family carry out their educational goals.
2. Life insurance provides peace of mind for every member of your family. You'll all rest assured with the understanding that a devastating event would not trigger a financial hardship. This peace of mind provides value beyond measure.
3. Life insurance can also be used as part of a solid estate plan. It helps minimize estate taxes and ensures your assets are distributed according to your wishes and legacy-planning desires.
4. A conversation about life insurance can ward off future family conflict. It allows your wishes to be known and followed so that your loved ones are not left fighting over financial matters during a challenging emotional time.
5. Once your family has a better understanding of your desires, they'll likely feel more comfortable asking important financial questions or clarifying points of confusion. Their feedback may help you select the type of policy and amount of coverage that best suits your needs.

Prepare to talk about life insurance.

Before you start a conversation about life insurance, do the following homework:

• Familiarize yourself with the basics. You'll be able to answer questions and supply clear explanations to your loved ones if you understand the ins and outs of how life insurance works.
• Have a clear handle on your financial situation. Whether or not you share it with your loved ones, update your budget and prepare a list of your assets, liabilities and goals. These puzzle pieces are critical in seeing the big financial picture.
• Set aside time on your calendar. Parents with small children can attest even a mundane discussion with their spouse is nearly impossible without constant interruptions. Life insurance is a topic that requires focus. You can set the right tone by creating a calm and relaxed environment where conversation is comfortable.

Life insurance conversation starters

The key here is to be open and honest about why you want to have life insurance. Keep the focus on future goals rather than death and your conversation will be more productive.

Here are a few ways you can approach the topic with your spouse or partner:

• I've been thinking about life insurance lately and wanted to get your thoughts on it.
• I'm doing some research on life insurance and have some questions. Can we set aside a few minutes to talk about it?
• If something happened to either of us, what would we want to do in terms of our finances?
• I'd like to be sure we have a plan in place for our children's future, including financially. Can we talk about how life insurance could work as part of that?

Here are a few conversation starters with a potential beneficiary:

• I'd like to talk to you about my financial plans, in case of an emergency.
• I've made some financial plans that involve you, and I wondered if we could set aside some time to discuss.

During the conversation, be sure you're listening to your loved ones' feedback and concerns, not just sharing your own desires or plans. When they're speaking, listen with an open mind and reflect back what they've said so they understand they have your full attention.

Not only is this an important conversation to have, but it'll also set the tone for future financial discussions. If your loved ones feel they've been heard, you've laid important groundwork for open and honest financial conversations.

Before you end the conversation, talk about next steps. How do you plan to address your life insurance concerns? And how can you move forward together? For example, if you plan to call a life insurance agent, agree to schedule a call when both of you can join.

What to do after talking with your family

There's a saying, “Activity without action is malpractice.” Congrats on having what can be a tough conversation about life insurance coverage. Now take the following steps to reap the benefits.

Speak to a professional.

Once you and your loved ones have had an opportunity to talk, use your momentum to schedule a call with a life insurance professional. These professionals are used to having conversations with two or more people at a time, and they're well-versed in asking questions that facilitate a positive discussion.

In fact, you may find that talking to a professional is helpful because they're willing and able to ask the tough questions that you and your spouse or partner may not have discussed. They can also be sure you've thought about your needs from a few different angles and don't have any gaps in your coverage.

If you and your partner have opposing perspectives on the types of life insurance that may make sense for you, a professional can be a neutral third party who's able to supply you with useful information.

Get a quote.

Once you and your partner have spoken with a life insurance professional and understand the type of life insurance you need, you're ready to get a quote. From there, you can adjust the amount according to your budget.

By taking the time to have a conversation with your loved ones about your life insurance needs — and acting based on that conversation — you're giving your family the gift of peace of mind.