Thanks to life insurance policies and credit cards, more families are able to handle funeral expenses for a loved one without being left in dire straits. But what happens two, six or nine months after a breadwinner passes away? Can the surviving family members still afford to maintain the home, keep up with monthly expenses or send kids off to college? For many households, no is the likely answer.  
“In the early stages of financial planning, I ask my clients one critical question: ‘How long would it take for a household to feel the financial impact from a loss of the primary income earner?’” says Michael V. Daniels, a senior financial adviser with Financial Focus Group in Jersey City, N.J. “In many cases, life insurance is a cost-effective way to help families replace a significant loss of income.” 
It may be difficult to think about, but life insurance is one of the basic building blocks of a solid financial plan. The economic stability of a household can be quickly derailed by an untimely death. Life insurance isn’t just for burial costs; it can also provide funds to supplement the family’s loss of income and ward off any potential monetary challenges surviving loved ones may face.
A 2011 study sponsored by two leading insurance industry associations, LIMRA and the nonprofit LIFE Foundation (now known as Life Happens), found that African-Americans are more likely to have life insurance, with 76 percent of those surveyed owning insurance, versus 62 percent of Whites and 54 percent of Hispanics. Underinsurance, however, remains a problem; a 2012 poll revealed that 42 percent of Blacks said they were in need of more life insurance, compared with 32 percent of the total U.S. population. 
Read more in the February 2016 issue of EBONY Magazine.