Why You Should Create An Emergency Fund – With Life Insurance!

An emergency fund is exactly what it sounds like — money stashed away that can be used in times of financial distress, typically equal to 3–6 months of income. The purpose of an emergency fund is to improve financial security by creating a safety net that can be used for unanticipated expenses, or sudden life changes.

According to the Federal Reserve, between retirement and savings, most 35–44 year-olds only have around $39,000 saved up. That means if you or your spouse died unexpectedly, your family could use up all of their savings — including retirement — just to keep on their feet.

Term life insurance is an excellent source for emergency fund planning should the unexpected happen. For just pennies on the dollar, you can provide some breathing room for your loved ones as they grieve and get back on their feet. The death benefit from a life insurance policy typically provides far more than any traditional savings-based emergency fund could — $250,000, $500,000, or more — delivered as a tax-free lump sum when your family needs it most.