Question about Term Life Insurance for Dave Ramsey Fans - Mothering Forums
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#1 of 8 Old 03-29-2008, 08:16 AM - Thread Starter
 
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Hey all. We are just starting our TMM. We are actually pretty well off, as we already had over $1000 in savings for our emergency fund. Last night I transferred all but the $1000 and put it toward our debt. Yay! We are so close to paying off our credit cards and van - already almost debt free except for the house. What a way to start out!

Anyway, my question is about Life insurance. We currently have a 20 year term on dh and another 20 yr term on me. We also have a whole life policy on dh. We are paying $173 a month for the three policies. We are ready to dump the whole life and just have two term policies, but I am not sure how much money we should be insured for.

Dave says 10 times your income. Well, dh's income is 50,000 and mine is 0. Do I split our combined income and do 10 times that, or 10 times the total for both of us? I am so confused.

My dh would be fine w/o me financially - we have tons of family to help handle the stuff I do, but I have nothing w/o his income, so insurance is a big deal.

Thanks for any advice/ suggestions.

Jennifer :, blessed wife to 4/00 and joyful mother of 6/03, 2/06 and 3/10.
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#2 of 8 Old 03-29-2008, 09:27 AM
 
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Hi We are in the process of doing a similar thing with dumping the whole insurance. We have 10x the income on him AND me in term. I know DH wouldn't want (couldn't?) go back to work immediately if something happened to me, and knowing that the finances would be there for him to have to use as needed gives me comfort that he would at least not have to worry about that. He could be at home with the kiddos for as long as he/they would need him and then go from there...
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#3 of 8 Old 03-29-2008, 10:27 AM
 
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I am a SAHM and have a $300K term life policy, my DH has the same amount. Our financial advisor suggested that amount when we told him what our goals would be if one of us died; pay off the house, surviving spouse able to take a year off from work, etc. I think we will be increasing or amending our policy soon.
HTH.
Good luck on your TMM
Way to start off!
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#4 of 8 Old 03-29-2008, 12:48 PM
 
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WE're aiming for same for both of us, but thats because we have a special needs child and would need a nanny or him to stay home, so if we do the amount I am hoping for, he'd be able to live off the proceeds of investing it
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#5 of 8 Old 03-29-2008, 03:56 PM
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The life insurance policy is simply there to financially replace the deceased spouse. If your husband was to pass away, you need to replace his INCOME, so that you can continue to be a SAHM. If YOU were to pass away, your husband would need to hire someone to care for the children, and possibly to cook and clean (or at least hire someone part time to help around the home).
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#6 of 8 Old 03-29-2008, 04:15 PM
 
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wow, those premiums are NUTS!

we have a 75 year term $500K on DH, 75 year term $500K on me, and $10K on each of the kids, and our total monthly premium is $75 for eeveryone.

definatley drop the whole life, and do some shopping around.

wife to my awesome DH, homeschooling, unassisted birthing, food growing, life loving mama to 5 crazy monkeys. :
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#7 of 8 Old 03-29-2008, 04:24 PM
 
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Do the 10 times on your hubby (or more if it makes you feel better), and *at least* half as much on yourself. If nothing else, you hubby would be able to take some time off work to spend with the kids and grieving (I assume) and such. That's our plan, as hubby can still work and make decent money, where I am not. Especially since I've been out of the paying work force for almost 4 years.

Fwiw, I'm a sahm, and my policy's $350K. Hubby's policies total about 11-12 times his income (two smaller ones through his work, plus our own private one). I'd most likely be able to stay at home with the kids until they leave the house if I'm really frugal and such, I'd just need to stay on top of it.

Wife to an amazing hubby, mother hen to four chicken3.gif 
(If you're curious, 2003, 2006, 2008, 2010, and yes, it's a busy house)
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#8 of 8 Old 03-29-2008, 04:31 PM
 
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We are just going through this as well. We had a financial planner do a work up and he suggested I get $350,000 for myself (I make about $6,000/year WAHM) and for Dh we are getting $750,000 (He makes about $80,000 after taxes).

If he dies I will be financially set to pay off debt AND stay home until the kids are in school, save for college, retirement, etc.

If I die he will be able to afford a nanny, pay off some of my debt, save for the kids college, etc.

We are going with AIG, and for those two policies, WITH the return of premium (meaning you get back every cent you pay for at the end of 30 years if you don't die, but without interest) it is like $130/month.

Now that is based on him being 30, me being 25, and non-smokers, no serious health history.

Sounds too good to be true, I know- but it is legit. And in 30 years we will get back like $40,000! Check it out.

Amy, mommy to Ava, 6, Gavin, 4, Lila, 2, and Baby #4 due in early November! joy.gif
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