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Crowdfunding sites like GoFundMe aren't substitutes for life insurance

Experts say crowdfunding sites aren't reliable.

Life can end in an instant.

When tragedy strikes, nothing can prepare you for the emotional toll it can take, and to make matters worse, you may not be financially prepared either.

These days many people are turning to crowdfunding sites like GoFundMe or YouCaring in hopes of raising enough money to pay for funeral costs or to help with the financial burden of losing a loved one.

“BBQ plates and now with the internet crowdfunding… these are all potentially solutions, but they rarely raise enough money to cover the need and they rely on the generosity of others which may or may not be there,” said certified financial planner Ben Gurwitz.

Gurwitz doesn't sell life insurance, but he does help people understand what their needs are.

“Life insurance is an important part of anybody's plan,” he said.

When considering a life insurance policy, Gurwitz says to first ask yourself a question.

“The real question to ask is does someone rely upon me for significant portion of my income? The need for life insurance is generally higher when someone is younger and has a young family,” he said.

While whole life and universal life policies can be expensive, Gurwitz says if you're looking for something cheaper go for term life insurance.

“It's very inexpensive to buy a lot of coverage if you buy term because you're not buying life insurance that would pay when you die when you're very old,” Gurwitz said. “It's only if you die, and the younger you are the less likely that is to happen, but the more traumatic it is financially for the people who rely upon you.”

For example, a $100,000 term life policy might be as low as ten dollars a month to buy.

And a $500,000 policy could be as low as $25 or $30 a month.

“Term life policy has a defined death benefit, so if it’s a $500,000 policy and you buy it and pay $25 a month and a month later you get hit by a bus, your family gets a $500,000 check,” Said Gurwitz.

But don't wait until it's too late.

You won't be able to buy a good policy if you're seriously ill.

“You pay for life insurance with money, but you buy life insurance with your health,” said Gurwitz. “So just like when a hurricane is coming you can't buy wind storm insurance, with life insurance the best time to get it is when you're healthy.”

Gurwitz also says not to trust policies that don't ask you any questions about your health or require a physical exam.

They could be assuming you're already in poor health and will therefore charge you more.

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