"People don't think about, 'What will my family do if I am gone and not earning a living?' " says Peter Katt, a fee-only life insurance adviser. "The whole point of this kind of planning is to provide the family with maximum flexibility so they're not stuck."
Planning for your death is not a cheerful topic. Too often, parents make a quick decision, ignoring important considerations. Among their mistakes:
Not enough life insurance.
Families don't always insure a parent who is staying home to care for the children. "They don't think that the person who is not bringing in an income needs life insurance," says Greg Daugherty, executive editor of Consumers Union. But if that person dies, the other parent can't stop working and usually has to pay someone to help care for the family.
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