Mothering Forum banner

1 - 13 of 13 Posts

·
Registered
Joined
·
512 Posts
Discussion Starter #1
Hi- I hope this is the appropriate place to post. It has recently come to our attention that DH and I need to purchase some more life insurance. I have about $80 K and DH has about $250K in coverage. I am struggling with how much coverage to get for both DH and I. (We have 1 child and I SAHM)Anyone have any wisdom to offer on how to decide? How about experience with different companies. Right now our Life insurance is through Thrivent Financial, but we really need to do some shopping around I think.<br>
TIA
 

·
Registered
Joined
·
3,591 Posts
We have a LOT of life insurance, but it's related to our circumstances:<br>
we are leaving the children with dp's sister, who already has 4. We will have 3. Plus, one of mine is not legally my partner's child, and so she will have to either pay off the non-involved (but legally entitled) father, and pay legal fees associated with fighting with any of my family who wants to fight for that child.<br><br>
This family would have to pay for a new house, would need one parent to stay home, would need a passenger van, and I want to be able to provide all of them with as much education as possible (can't just say MY KIDS ONLY).<br><br>
We each carry the same amount of insurance. So if either of us dies, the other could live comfortably for years staying home with the kids, and hire the help any of us would need upon suffering such a loss.<br><br>
So I guess it depends on what you want the insurance to buy you.<br><br>
Edited because I didn't state the amount: $2 million each. Plus 2 years' salary through DP's work for him if he dies.
 

·
Registered
Joined
·
2,219 Posts
There is 590K on my husband, and over 750K on me. Why? I am a sahm, my older two will need to be "bought off" their bio dad. My husband would need the money for a court battle, and or to hire a nanny for the children. ALSO, if both of us die... the people taking the children would need the money for college, daycare, housing ect.<br><br>
My husband's amount is about 8 times his annual salary.
 

·
Registered
Joined
·
2,556 Posts
I've read that in a single-income family the primary wage earner should carry enough insurance to pay off all debts (including mortgage, car payments, etc), fund all childrens' education (whatever you decide is appropriate - community college, private college, private school, etc), and provide for normal living expenses for 5 years (longer if you want the non-wage earner to continue to stay home w/children). The stay-at-homer should carry enough to pay off all debts and provide for extra childcare expenses (assuming the primary wage earner would continue to work), plus whatever extra you can afford.<br><br>
For us, we each carry enough to pay off all debts (car and student loans, and a ski cabin) and cover funeral expenses - we have no house and no children. That's about $50k each (it so happens we get this free through our jobs, which provide 1x annual salary as a benefit). When we have a house, we'll tack on enough to pay off the mortgage, and when we have children, add on appropriately for the given situation.
 

·
Registered
Joined
·
2,330 Posts
It really depends on what you want coverd. If you both died, what would your kids' guardians need? If your husband died, would you want to go back to work? When? If you died, would he want to stop working? Hire a nanny? For how long? etc. etc.
 

·
Registered
Joined
·
2,922 Posts
I don't know any formula, but as other people have said, what's the situation going to be if someone dies? My father suggests, "Get as much as you can afford!" My husband and I both have $1million through State Farm. It's under 2 grand a year for us--would be less if baby weight wasn't supposed to be off in 6 weeks or some such nonsense according to them! <img alt="" class="inlineimg" src="http://www.mothering.com/discussions/images/smilies/lol.gif" style="border:0px solid;" title="lol"> Anyway, we want the surviving parent to be able to stay with the children for a decent length of time, and not have to worry.
 

·
Registered
Joined
·
973 Posts
Our life insurance on both of us is enough that the surviving parent could quit his or her job immediately and not worry at all about paying the bills for five years. We wanted the surviving parent to be able to focus entirely on caring for our son and meeting his needs after such a traumatic event in his life.<br><br>
That said, the reality is that both of us would probably work part-time if it happened, so that the money didn't run out in five years, but it would depend on DS's needs and his age at the time.
 

·
Premium Member
Joined
·
1,550 Posts
We are young so we bought a tad more than we felt we needed at the time because we could lock in the term rates for so low since we are in our mid 20s. Our reasoning was that our incomes will rise in the future and buying the additional amounts needed later on could be drastically more expensive later on if our health was worse etc.<br><br>
Buy term insurance only. I would suggest 5-10 times your income (our your expected income if you are finishing school, etc), plus any outstanding debts.
 

·
Registered
Joined
·
8,198 Posts
The purpose of life insurance is to cover the income one makes for a short period of time. Our goal is not to profit from our deaths. Dh has minimal coverage. I have none. If he dies, I can get a job pretty fast. If we both go, we have saved plenty to provide for dd.
 

·
Registered
Joined
·
1,725 Posts
We have $1 million in coverage for my husband, none for me. We don't need life insurance for me, because my retirement savings (which he wouldn't need in retirement, since he has is own retirement savings) are sufficient to pay for a nanny/daycare, a housecleaner, summer programs for the kids, etc. -- whatever he might need if I were no longer here.<br><br>
We figure that $1 million should provide me with a lot of flexibility -- I wouldn't need to return to the paid workforce for many years if that seemed like the best course of action.
 

·
Registered
Joined
·
3,591 Posts
<div style="margin:20px;margin-top:5px;">
<div class="smallfont" style="margin-bottom:2px;">Quote:</div>
<table border="0" cellpadding="6" cellspacing="0" width="99%"><tr><td class="alt2" style="border:1px inset;">
<div>Originally Posted by <strong>velochic</strong> <a href="/community/forum/post/7893590"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a></div>
<div style="font-style:italic;">The purpose of life insurance is to cover the income one makes for a short period of time.</div>
</td>
</tr></table></div>
<br>
I don't believe this to be true for everyone. The purpose of life insurance for us is to provide Dp's sister with the ability to raise 7 children, considering that she would not be able to go back to work after a short time. Plus covering legal costs associated with gaining custody of a non-legally-related child. Plus allowing the surviving spouse (if only one died) with as much support as possible in case that spouse is not able to mentally cope, and cannot go back for a long time. That spouse and remaining children may require very expensive help to have better qualities of life.<br>
I do not see life insurance as a way to take a short time off if my partner dies.
 

·
Premium Member
Joined
·
1,550 Posts
<div style="margin:20px;margin-top:5px;">
<div class="smallfont" style="margin-bottom:2px;">Quote:</div>
<table border="0" cellpadding="6" cellspacing="0" width="99%"><tr><td class="alt2" style="border:1px inset;">
<div>Originally Posted by <strong>velochic</strong> <a href="/community/forum/post/7893590"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a></div>
<div style="font-style:italic;">The purpose of life insurance is to cover the income one makes for a short period of time. Our goal is not to profit from our deaths. Dh has minimal coverage. I have none. If he dies, I can get a job pretty fast. If we both go, we have saved plenty to provide for dd.</div>
</td>
</tr></table></div>
We see it as a way to replace income over the entire course of our son's childhood and college education. At the time we purchased life insurance, we had less than $15,000 in assets. If we had died, there would be less than his guardian would need for a few years and whatever social security decided to kick in (subject to changes in the political climate). Our selected guardians are not family, have modest means of their own (teacher and a newspaper reporter) and no one in my family has meaningful financial resources to help care for our son. Now we have more assets, but still not enough to provide for a child the same way that our income would be providing for him if we were both alive for the next 20 years. Very, very few people have enough resourses in savings to provide adequetly for their children's needs for the next decade or more. Many Americans have debts that would eat up all of their actual assets on death. Also consider that children that lose parent(s) may be in need of ongoing counseling or other professional, expensive, help not covered by medical insurance and that the guardians would need to buy the child(ren) medical insurance. I don't see any of these concerns as "profiting" from death.
 
1 - 13 of 13 Posts
Top