The Five Documents Every Family Needs
LIFE IS FULL of surprises, you need to be prepared for your family's sake. Here's a list of five crucial documents to help you prepare for the unexpected.
1. Medical Directive
A medical directive refers to two documents; a living will and a medical health-care proxy. A living will informs a physician how you wish to receive care in different situations. In the event that an accident leaves you with no brain activity, for example, you might decide not to receive nutrients that would keep you alive. A medical health care proxy names a surrogate names a who can make decisions on your behalf.
2. Will
What happens if you die before making a will? The court will assign an administrator to divide your assets according to state laws.
3. Umbrella Policy
We live in a litigious society. If someone trips on your icy front stoop, there's a good chance he or she will sue you. That is why financial planners recommend their clients purchase an umbrella policy for added liability coverage.
4. Disability Insurance
Many people receive disability insurance from their employers. But unless you can afford to live on, say, 60% of your salary, you probably need more. It is good to buy a personal disability policy. The idea is to fill in as much of the gap between your employer's plan and your current income as possible.
5. Life Insurance
As a general rule, each household breadwinner should carry a policy worth 5 to 10 times their annual income. But even stay-at home spouses should consider a little coverage so that their economic value is insured.
