Do you carry Life Insurance?

[taaren]

I'm curious to know, as we contemplate this for ourselves: how many people carry life insurance?
My parents and grandparents thought it was an unnecessary expense, and they have always been financially secure (their version was to put extra money into buying a second home so the rental income would provide in case of an emergency). DH and I are in our 30's and healthy with just one DS4, both of us have very un-glamorous but stable jobs that would leave us okay should the unthinkable happen to the other, monthly bills could be taken care of at least and the DVC membership was paid for with cash, so whoever was left would still be able to take the ever-essential Disney vacation. We'd be looking at a 20-year term policy just to cover until the kiddo finishes college (which we already have some savings for).
Insurance agents and consumer reports think its a must-have, but I question this when I see so many single parents that are okay, whether that's something I should make room for in our monthly budget.

 

[torinsmom]

I am a single mom and I cannot afford much whole life insurance. I am able to keep a $350,000 term life insurance policy for $46/month. It has a term of 30 years(about 28 left now). I plan to keep it, and also begin building up whole life as I am able to afford to do it. The way I look at it, it is kind of like having car insurance. Most of the time, I feel like I am throwing money away, because I don't really NEED it, but if something was to happen to me, I would be happy to know that my son will be taken care of.

MY dad said I should keep the policy until my son is 21 and then let it go, since he should be able to fend for himself before then. I feel like I would want to still leave him something though and $46/month is less than what I pay for a few fast food meals.

 

[mtblujeans]

At first, we got life insurance on DH to help me raise the kids if anything were to happen to him. Now, we both have a policy to give the grown kids a helping hand when we are no longer here.

 

[msmayor]

Insurance is necessary to pay for unexpected expenses and replace lost income.

You say that you AND your DH have jobs. If one of you were to die, the income would be cut - one less salary. Could you still cover ALL your bills one one salary? If not, then insurance is a necessity.

I personally think supplemental disability insurance is MORE important than extra life insurance because there is a greater chance of you becoming disabled than dying. If you have life insurance coverage through your employer, that may be sufficient, in which case I'd be looking at ensuring that you have enough disability insurance if you suddenly can no longer work. Employer plans and Social Security disability are generally woefully inadequate.

 

[lovetheduck]

Yes, we have insurance on both DH and I. Much more on DH as I would never be able to sustain our lifestyle without him. My insurance is more of to pay the child care he would have to hire is I weren't around. I would also consider our second home as a cost, not income. You never know what will happen in the future and if a time comes that you can't rent it out, you'll still have to pay the bills.

 

[bdcp]

Absolutely. It's called insurance because it's there as "insurance". It's necessary unless you want to possibly burden your spouse or family with unexpected expenses. It's not just about having raised the kids. It's all part of our financial planning, as is umbrella insurance (not likely to ever use it, but once again, insurance against the possibility). My best friends DH died unexpectedly at 46 of heart failure/attack. You NEVER know. She was fortunate to have a lot in investments and a low mortgage, but that is unusual and not likely to be the case for most people. Even in her instance, not having insurance meant paying out of pocket for things such as his funeral, burial, etc. that insurance would have covered. You have to think of who is left behind, not yourself.

 

[jodifla]

I'm curious to know, as we contemplate this for ourselves: how many people carry life insurance?
My parents and grandparents thought it was an unnecessary expense, and they have always been financially secure (their version was to put extra money into buying a second home so the rental income would provide in case of an emergency). DH and I are in our 30's and healthy with just one DS4, both of us have very un-glamorous but stable jobs that would leave us okay should the unthinkable happen to the other, monthly bills could be taken care of at least and the DVC membership was paid for with cash, so whoever was left would still be able to take the ever-essential Disney vacation. We'd be looking at a 20-year term policy just to cover until the kiddo finishes college (which we already have some savings for).
Insurance agents and consumer reports think its a must-have, but I question this when I see so many single parents that are okay, whether that's something I should make room for in our monthly budget.

Absolutely a must-have when you have a growing family!!!!!!!!!!!!!

Ever ask yourself what would happen to your child if you both died??? You should have life insurance and a will with a guardian for your child.

 

[taaren]

Absolutely a must-have when you have a growing family!!!!!!!!!!!!!

Ever ask yourself what would happen to your child if you both died??? You should have life insurance and a will with a guardian for your child.

The will was signed and notarized on the day my son was born, with DH's sister (who owns their home, and are financially stable with teenagers about to leave the home) happy to be the potential guardian. I also have no doubts that my son would be well-cared for as my family has modest but stable streams of income that they would continue to send his way should something happen to me. Work provides enough life insurance to cover the funeral expenses (2 years salary is automatic in our line). And yes, each individual salary could cover the basic expenses. Thanks for mentioning supplemental disability insurance msmayor - this is something that logically makes sense to me, just the insurance agents tend to be more vocal about life insurance which I find odd.

 

[pearlieq]

Aside from what DH's employer offers, we don't carry any. I would prefer to have a term policy on him, but that's not possible due to his diabetes.

We don't carry any for me--there's no need. He doesn't depend of my income and we can cover my "final expenses" out of savings.

 

[Riles_and_Gabe]

I have life insurance for both myself and my dh in addition to my work life insurance. Please keep in mind that if you are counting on your insurance through work only than you may run into a problem later down the road if you switch companies or are let go. When you leave a company, you are leaving that insurance policy. The older you get the more expensive the insurance becomes.

Another thing you may want to consider is getting your child a whole life policy becasuse it is super cheap and guaranteed for life. Often you can have it paid off in 20 years.

 

[PrincessBelle09]

We have 20-year term.

Until you are 100% secure to pay for all funeral expenses and any other expenses that may arise after the death of a spouse (time off from work, counseling for you and/or the kid, whatever other totally unexpected expenses that may come up after their death), definitely have TERM life insurance. It is definite financial security for your spouse and child(ren), so you do not have to even potentially stress over money if you've just lost your partner.

 

[disfan07]

My parents carry life insurance through my dads job as well as individual plans. i dont know how much exactly but I know that my mom has mentioned that it is enough to pay for the mortgage, expenses for about 7 years plus college tuition for myself and my brother (well...paying back college loans at this point).

So i'm guessing there is a fair amount in policies because college alone would cost about $175,000 for two of us.

 

[bdcp]

Aside from what DH's employer offers, we don't carry any. I would prefer to have a term policy on him, but that's not possible due to his diabetes.

We don't carry any for me--there's no need. He doesn't depend of my income and we can cover my "final expenses" out of savings.

Life insurance is not about being dependent on one person's income, it's about the expenses that come with one person being gone. i.e., mom doesn't work, dad does, no insurance on mom,mom dies, dad can pay the basic bills but all of a sudden has to pay for child care, etc that comes with losing mom. Or the opposite and mom has to go to work, not making as much as dad did and loses the house because of that. The only people that really don't need life insurance are the independently wealthy.

 

[HeyIt'sMe]

Yes, DH & I both have life insurance. We have insurance through our employers and term polices that we have on our own. My husband used to work for a life insurance company so he mananges our policies.

I am a strong believer in life insurance. My dad died when he was only 48. My mom, who was 46 and a SAHM at the time, was left to raise 4 kids (aged 17, 16, 14 and 6) alone. My dad had great life insurance, through work and on his own, so my mom was well taken care of. She didn't have to go out and find a job so she could stay home with my little sister like she did for us. She was able to pay off the house, send all of us to college, and have plenty of money to live her life comfortably until she passed away.

 

[akcire]

OP-Husband and I just worked this out in our house last month.

My husband and I owe no one money (house is paid for), except for our monthly bills: taxes, electricity, food, stuff we buy, etc.

We also have a good amount of money in savings, probably 10 years living expenses.

Husband is our "big" money maker. Through his job we buy 5 times his salary--it is crazy cheap like $5 a pay period. That is the maximum we can buy.

I am pregnant with our first (due in April), and am looking to buy more life insurance on him. I am looking for an amount to completely cover the cost of college for a child and also to help cover expenses should something happen to him. I am looking at buying two policies. One a 20 year term and one a 10 year term; so as he lives longer and our savings grow we can have less insurance. I am looking at a 10 year policy of $250,000 and a 20 year $750,000. I have quotes from three large consolidator groups and all are less than $1000 per year (and he does not qualify for preferred rates); we just need to pick the policy.

I added up all our monthly expenses, and figure Social Security survivor benefits will cover most of those costs. I then took into account the growth on our savings, the payout from his office, and came up with $1 million dollars as my cushion number. This will allow me to retire, pay for college, take vacations, and not be obligated to work more than part-time (not saying I would not work full time--just want options). It will also give him life insurance redundancy should he lose his work policy.

Since we are planning for me to stay home, he felt no need to have any insurance on me. He understands he will have increased costs if I die, but is not concerned about covering the costs. His words were essentially that day care for the kid, cannot cost more than my shopping. Also since I have worked a full time, plus part time jobs for more than 15 years I am fully vested with Social Security--so he'd get a few peanuts a month for the kid. (He also pointed out the decreased costs of my living expenses: not needing a second car, food and healthcare for me, etc).

I have no interest in buying whole life. I prefer to invest in investments. I am only buying term as "income protection" if my husband has an untimely demise. Since the costs are so low, to me it is worth it for the peace of mind. Could I put the $1000 a year in savings instead, sure; but what happens if he dies in 5 years--I have $5000 instead of $1 million. Of course at the same time, he could live to be 100 and I could throw away 20 years of policy costs.

 

[MrsPete]

Single people and couples can get away without life insurance. If your income disappeared, no one would suffer tremendously in a financial way.

Parents have a moral obligation to protect their children financially (and to arrange guardianship too).

A related topic: Disability insurance matters too. Would you be okay if your spouse suddenly lost his income AND had medical bills? This is probably worse (financially) than death.

 

[mjkacmom]

Yes, a million on DH, half of that for me. Term, of course.

 

[Pakey]

We have no debt but I carry enough term life to cover 1 year of salary. That's plenty of time for my husband to find a new wife.

 

[Fyrefly]

I think it would be important to consider:

1) If one of you died, sure the other could pick up the slack and you could still live, but would you have enough $ away to be able to deal with half a million or more in hospital fees if it were something major like cancer? I think it's much more likely one of you would die after incurring LOTS of hospital bills than just being hit by a bolt of lightning somewhere. Even a car crash would involve hospital bills. Something to think about.

2) You say you would be fine if one of you died, but what if both of you did? If you, heaven forbid, both died in a car crash or something, you say there are relatives who would take any children in. But would there be anything to help them with that transition? It's a major change adding even one child to an established household. Could be anything from just adding more money to food/clothing/water/electricity and everything else new human beings come with, to maybe even needing to expand living space or pick a new home because of lack of room. Would there be money in existence to help them with that transition, or would they be left to deal with it on their own? The latter doesn't sound far to me.

If you can account for those two situations with money you have in savings or cash value selling off whatever would be in the inheritance (though I personally don't think whoever survived the other would be okay with selling the house to meet medical bills), then I guess you're fine, but I don't think most people have that kind of cash floating around. I would say get some, especially since you both provide income. I have no insurance on myself since I'm not supporting anybody, and my mom is a stay-at-home mom. So we have a huge one out on my dad because we would need it if something happened, he supports our way of life. It's a what-if, and you need to think about the absolute worst case scenario and plan for that.

 

[luvthemouse71]

I have life insurance and disability insurance as part of my benefits through work.