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Old 03-10-2007, 07:45 PM - Thread Starter
 
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I have a couple questions about life insurance. The first is how much coverage do you need? I seem to remember some formula for it-maybe X times your income?? My only concern is that the coverage appears to only go up to 150K which sounds low to me. That wouldn't even pay off our mortgage if something happened to dh.

Second, for those who buy their own, whats a good price? DH isn't offerred life insurance through work and we just got a flier in the mail from our credit union. The prices seem to be about 15/month for both of us-does that sound resonable or way out of whack? I'm 31, dh is 41 and we don't smoke/in good health.

TIA!

Lisa, mama to A (3/05) and R (11/07) and L (8/10)
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Old 03-10-2007, 10:07 PM
 
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I'm no expert, but I'm happy to tell you what we do. DH is able to get insurance 1x his salary from work for free, and 3x if we pay (and its cheap), so we do that. We then supplement the 3x from work with another 17x his salary from a private company. We have the same amount of life insurance on me (20x Dh's salary) as on him. We also have supplemental disability for DH, so he gets 60% of his salary through the disability from work, we have a seperate policy that would add another 20%.

This is based on our goals. If he dies, I want to be able to stay home and still be a SAHM for as long as I want, which means the life insurance has to replace his income from now until he would have retired. That takes a lot of money today to manage that. If he dies, I will get SS for the kids. However, if I die, since I haven't worked in the last 3 years, he will get no SS benefits for the kids, so my insurance has to make up for that. If I die, he wants to be able to take a job closer to home work less hours for less pay so he can raise them, and also would have to pay for childcare, etc. which is why we need so much on me, though it would seem like we shouldn't.

This costs us thousands of dollars a year, but it is very important to us that our goals for each other (retirement, SAHM) and for the kids (college, having parents who are there for them, etc) happen, whether we are there or not.

Mightymoo - Mom to DD (6) and DS (4)
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Old 03-11-2007, 12:02 AM
 
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The coverage each family needs is going to be different, how's that for annoying?

We have a total of... 11 times dh's salary in life insurance, and about half that coverage on me (I'm a sahm). Neither of us would need a lot per year money-wise once the mortgage is paid off (like $11K-$15K a year for regular bills and property taxes), so we feel comfortable with that. If dh died, I'd have the life insurance and possibly social security if it were still around. I'd be able to stay at home with the kiddos for years, just with the life insurance. If I died, it'd be enough money to sock away for a rainy day, pay off the mortgage, and help dh out for a few years while they all adjust. But he's also got a ton of earning potential (way more than me), so he's pretty much set regardless.

For some reason I don't feel comfortable telling you our numbers on the thread, but if you pm/email me I can share - we just got our policies nailed down in the last few months.

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Old 03-11-2007, 12:24 AM
 
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Originally Posted by mightymoo View Post
However, if I die, since I haven't worked in the last 3 years, he will get no SS benefits for the kids, so my insurance has to make up for that.
If you've got 40 credits for SS, it shouldn't matter if you've worked in the last 3 years:

http://www.ssa.gov/survivorplan/onyourown.htm
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Old 03-11-2007, 12:27 AM
 
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We don't have life insurance beyond what is provided for free for DH at work, since we have enough saved to provide for either one of us for enough years for the kids to get out of the house. I think it's important if you buy life insurance to plan for adjusting it as your savings grow.

We have thought about getting policies, however, to use as commodities for life settlements. So, if we ever had a medical condition and wanted treatment the insurance wouldn't pay for, we could sell our life policies for the money to get that treatment. It's something my dad is invested in the other side of (buying policies from people who are most likely dying, there are companies who allow you to invest in these, and it's actually a really good investment). It just seems like it would be something that would give us some peace of mind.
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Old 03-11-2007, 12:28 AM
 
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You can get seperate mortgage insurance that will pay off your mortgage in the event that your dh dies, or you die depending on who you insure.
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Old 03-11-2007, 12:31 AM
 
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DH has about 7x his income in insurance, and I have about 4x his income (I am a sahm). Its all private except for a small amount that is through his employer. I would like to see us both double what we have, since we bought this when our first kid was born and I am about to have our 3rd child. Its a goal for the year.
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Old 03-11-2007, 04:20 AM
 
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Originally Posted by SusannahM View Post
If you've got 40 credits for SS, it shouldn't matter if you've worked in the last 3 years:

http://www.ssa.gov/survivorplan/onyourown.htm
I don't have 40 credits, I didn't work long enough before SAH to get them.

Mightymoo - Mom to DD (6) and DS (4)
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Old 03-11-2007, 08:39 PM - Thread Starter
 
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I don't have 40 credits, I didn't work long enough before SAH to get them.
How do you know if you have 40 credits?

Lisa, mama to A (3/05) and R (11/07) and L (8/10)
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Old 03-11-2007, 08:47 PM
 
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We applied for, but were denied $2 000 000 each. Why so much? Well, primarily because if we were to both die, my partner's sister would have our 3 and her 4 kids to raise. They would need a bigger house, she would lose her ability to work, she would need a passenger van and I would want ALL of the kids to have their post-secondary education paid for. I couldn't just say: "here's enough for MY kids. Too bad about yours". Also, $2 000 000 each because if one of us died, well, I think we should make it as easy for the other as something like that could possibly be. And, we're in our mid-20s, so very young still and lots of life left to live.

However, we were denied by the underwriter and are trying to figure out how much we CAN have. Probably 1.5 million.

4 kids under 10
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Old 03-11-2007, 08:53 PM
 
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I read something once that said get enough life insurance to cover the final costs, plus about 6-10 years of that persons income.

Since my husband is our sole source of income and I haven't finished my degree yet, we have a lot of insurance on him. The total amount is enough to cover about 20 years of expenses. Then again, he has a really dangerous job.

I have $100,000 of coverage through dh's job, and then he has a much larger amount. That is free for us. Then, we got him an extra policy through our insurance company. It's $300,000 and it costs about $32 a month. He's 21 and doesn't smoke or drink or anything like that, and is in perfect health.

$15 a month for 150,000 is about average for here.

SAHM to Ninja Boy (6) surf.gif and Monkey Man (4) carrot.gif.

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Old 03-11-2007, 09:03 PM
 
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Originally Posted by lisalulu View Post
How do you know if you have 40 credits?
You should get a yearly SS statement, or at least you should have the last year you worked (for pay). Or you can request one here.

My dad's basically disqualified from SS benefits because he hasn't had a job since 1986 (every job he was offered was 'beneath' him, lots of other issues there). So they're biding their time while mom finishes another few years at the college and can get full benefits from her working all that time. So we won't get any SS from me, even though I worked 10+ years in up to 3 jobs at a time pre-kids.

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Old 03-11-2007, 11:00 PM
 
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How do you know if you have 40 credits?
I'm not entirely sure how you can find out the number of credits you have, since it doesn't seem to be on your SSA report like it should be IMHO. They mention credits on the report, but don't say how much you have - there is a formula. I think you get up to 4 credits each year, each credit is for at least $900 (that was the number on the statement I just looked at though it was from 2003) dollars in income, so if you've worked full time for for 10 years, you'd have 40.

ETA - http://www.ssa.gov/pubs/10072.html is a page on calculating credits. Looking at it and my statement, I wonder if I don't have 40, I only worked full time 4.5 years, but I did a lot of internships in college and worked in high school, so I have 10 years of earnings that look like they are over what would have been the min for 4 credits 14 years ago.

Mightymoo - Mom to DD (6) and DS (4)
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Old 03-12-2007, 12:22 AM
 
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The statement I just got last week from Social Security had the # of credits on it. It said in the explanations that you get one credit for each $1000 of earnings, up to 4 credits per year. So, if you earn $4000 per year, you get your 4 credits. You have to do this for 10 years to get your full # of credits. Since $4000 really isn't that much to earn, it might be worth it to do just a little side business or something to get your credits for the year, IMO. I didn't work 10 years after college by a long shot, but did stuff during high school and college that went toward it. It's also kind of interesting to look at your earnings over the years on the report.
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Old 03-12-2007, 12:24 AM
 
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The statement I just got last week from Social Security had the # of credits on it. It said in the explanations that you get one credit for each $1000 of earnings, up to 4 credits per year. So, if you earn $4000 per year, you get your 4 credits. You have to do this for 10 years to get your full # of credits. Since $4000 really isn't that much to earn, it might be worth it to do just a little side business or something to get your credits for the year, IMO. I didn't work 10 years after college by a long shot, but did stuff during high school and college that went toward it. It's also kind of interesting to look at your earnings over the years on the report.
Maybe they changed the report, the one I have is from 2005. Where did it say it on there? I saw the explaination up at the top left, but I don't see # of credits I have earned listed anywhere...

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Old 03-12-2007, 02:21 AM
 
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It should be at the top half of the second page where it tells you the actual amounts you'll receive for each type of benefit. Mine just says "You have earned enough credits to qualify for benefits," but in the years before I had enough credits, it told how many credits I had.
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Old 03-12-2007, 02:29 AM
 
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It should be at the top half of the second page where it tells you the actual amounts you'll receive for each type of benefit. Mine just says "You have earned enough credits to qualify for benefits," but in the years before I had enough credits, it told how many credits I had.
Ah, hmm, mine does say that. I don't remember previous years saying the number of credits I had, but the oldest one I have is 2003 and that would have been 10 years of work. I guess I just assumed that didn't necessarily mean *full* benefits. I really wish they'd say 'you have earned 40 credits, etc'. Maybe we can lower our life insurance on me a little then.

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Old 03-12-2007, 01:00 PM
 
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DH and I have a decent amount of life insurance, although I always worry about if it's enough. We have a separate insurance on the mortgage, so that it is fully paid if either of us dies. Through work I have 2x my salary and he has only about 1x his salary. We each then have a separate $250,000 policy that doubles in case of accidental death. I think we get survivors' benefits and stuff through the govt, but to be honest I'm not really sure about that part.

Laurie wahm (virtual paralegal) of 3 wonderful boys (11, 9, 5). 1st by c-section for breech, 2 by VBAC (one miscarriage between child #1 and #2).

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Old 03-12-2007, 03:12 PM
 
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We have one million dollars for each of us. It's around $1500 a year, I think (the bill should be here any day).
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Old 03-12-2007, 09:30 PM
 
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I think the formula is 10 times your annual income. We own a small business and our income fluctuates so we have $1 Million in coverage on DH for $88 a month.

We have $500,000 for me and it's around $40 a month.
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Old 03-13-2007, 11:07 AM
 
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I don't have 40 credits, I didn't work long enough before SAH to get them.
Me neither. I have somewhere around 20.

I figure that if SS looks like it will be around still in my old age, I could go back to work for a few years after my kids are grown.

Quote:
Originally Posted by lisalulu
How do you know if you have 40 credits?
They send you a statement once a year in the mail.

----------

When I worked, my company paid for a $20,000 policy for me. It was a few dollars per month.

Now we have none.

We have family close by in case something happens. And I could always get a job if necessary. I am very employable.

Leigh, mama to Rostislav homeborn Aug 9 2007, and Oksana homeborn Feb 24 2011.
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