Do we need life insurance?

buddhabelly · January 2010

I am 26 and dh is 29. Our son is 15 months. Dh and I have some life insurance through our work. (one year's salary for each of us.) Well, one of dh's friends sells insurance and he's trying to get us to buy a $100,000 term policy on each of us. It would run about $30 per month for both of us. Is this necessary? Our budget is kind of tight right now, but I do want to make sure we are "okay" if heaven forbid something happened.

*NNO* · January 2010

We only have life insurance through work. I have $60,000 on each person which I feel is sufficient.

CelticWife · January 2010

Here is a calculator:

https://www.bankrate.com/calculators/insurance/life-insurance-calculator.aspx

yoko589 · January 2010

You do need life insurance. It is something that you have to set money aside for too. If something were to happen to DH or you, would the other be able to pay the bills with their job alone? I work for an insurance company and we like to write policies when a house is purchased. The amount is usually close to what the mortgage amount is for.

aforst · January 2010

We purchased it when DS was born. We have a bit more on DH b/c he makes more than I do. Things we thought about were that we each wanted to have enough money to pay off our home, send DS to school, and have money to make up for DH's salary that we would be missing. Everyone has different priorities, so it would be up to you how much you wanted to take out. It's not a bad idea to have something though.

~CoCo~ · January 2010

DH and I are shopping around for insurance now. It's bad, b/c I don't keep track of these things, but I *think* we both have coverage through our jobs, but not a lot. In calculating our incomes and what we want to cover, we need at least half a million, though the premiums are still like $40/mo...

I just think I'd feel more comfortable knowing we have it.

avonbride · January 2010

Well, do you expect to live forever?

I can't think of a good reason to NOT have it. But don't buy it just because your friend is selling it (hopefully he's trying to be helpful and not meet his quota or something).

We ideally would want all of our bills covered and DS (and all future kids) education AND upbringing covered, so that the guardians wouldn't be footing the financial burden of raising them. A year's salary won't last very long.

flutterz77 · January 2010

We got a life insurance policy after ds was born. It runs about $40 a month for both of us, but I think it is worth it. Both of us also have a policy through our work as well. If something were to happen to both of us, there would be enough money to pay our mortgage off and then some. I think that is the big thing is to have enough where your mortgage would be paid off and any other expenses.

disbride061103 · January 2010

Honestly, one year's salary is really not a lot. If something happened, could you pay for a funeral and other realted items and then still money left over to continue to provide for you and your LO without the other person's income? We are insured for enough money to pay off our house, pay funeral expenses and then quite a bit more.

rynhales · January 2010

We have quite a bit on both of us, much more so on DH because he is the sole provider. I think it is very important.

BetchySprout · January 2010

Rule of thumb says 10x current salary. We have life insurance on each of us. It helps me sleep at night and it is a bill I would pay before rent if I had to, it is just that important.

Try Zander insruance, they are the ones Dave Ramsey recommends and we had a great experience with them.

tmp-354536812503300 · January 2010

Make sure you verify the details of your work policies. Do you lose that policy if you get laid off, fired, retire, quit?

I work for an insurance company and we always recommend supplementing your work coverage.

Make sure you have enough coverage to pay for burial, then figure if you want to be able to pay off any debts such as mortgage, credit cards, student loans, vehicle loans, maybe pay for LOs tuition for college, pay for living expenses for the remaining spouse and LO for a predetermined amount of time so it's not something to stress over if God forbid that times comes, if one spouse is left behind would you need to hire help for LOs care and do you want to be able to pay for that expense?

There are a lot of factors you can take in to account when you're deciding how much to get but you should definitely supplement outside of work if you can.

skoorbnibor · January 2010

We have life insurance for both of us, 2x our mortgage. My husband didnt feel comfortable with less

inbetweendreams · January 2010

Yes, you need it. You need to be prepared if something happened to one or both of you. Both DH and I have smaller policies through work, but we took out additional policies for each of us. Our goal was to be able to pay off the mortgage and cover funeral expenses if something happened to one of us. That way, the other could stay in the house, pay for a funeral and not have to worry about finances.

I think it's definitely something you should look into, but make sure you understand what type of policy you're signing up for.

rach312 · January 2010

There is a woman on my local board that just lost her husband. It can happen. He was only 33. One year's salary isn't going to go very far. Funeral expenses are expensive and then think of the daily expenses and what you would need as far as child care, etc. if the other person was gone. I agree with pp that you need to look at one of those calculators and examine your personal expenses. DH and I agreed that neither one of us would want the family to have to move if the other died - so one priority for us was to make sure we had enough to cover the mortgage and funeral expenses (plus our other expenses we calculated). Also - $30 a month for a $100,000 term policy seems a little high to me - unless of course you have risk factors. You can always shop around.

Shell24 · January 2010

I think yes, absolutely, when you have kids.

My DH is insured for 1 million and I am insured for 500k. How much you get will depend on what you want it to cover. For my DH, it needs to cover paying off the mortgage, college tuition and some salary replacement. For me, it needs to cover paying off the mortgage, college tuition and any daycare costs my DH would incur (since I stay at home).

With term insurance, I think it's most important now, and through the time kids are in high school and into college. After that, the amount you'd need should dramatically decrease, since typically you'd think mortgages are almost paid off, if not paid already, and college tuition would no longer be an issue. Typically a term policy will last 30 years (which would get you and your DH through the most important years for it).

mchlle320 · January 2010

I would. My DH and I both have life insurance. My main reasoning was that my mother died when I was 11 and had no life insurance. My father had me and my two brothers to support. It would have been very helpful for him to have that extra money.

ss+el · January 2010

If you have life insurance through work (I assume your company pays for it), see if they have supplemental policies that you can pay for. They are often cheaper than getting it independently. Make sure you ask if you can keep the policy if you leave your company, though. Mine runs almost 1/2 of what your friend is trying to sell it for and if I quit, I can keep the policy at the same premium.

J+O · January 2010

We have life insurance, and I think it's important. DH has a policy through work, and we also have another policy over 100,000 for each of us. I'm actually thinking about raising it a little more. We pay $16 a month for my policy, and $22 a month for DH. And for peace of mind I think it's worth every penny.

LoriFalce · January 2010

My father was killed in a car accident when he was 23. You never know when you will need it.

Ciconrad · January 2010

IMO, if you can afford it, you should have enough to cover yoursalary for a 15-20 year period of time (assuming interest/investment income is made off the pay-out). This would allow the other spouse to maintain the current lifestyle when the children are still minors/going through college. Even though I am a SAHM we have a policy for me - which is enough to cover a full time, in -home nanny until my children are teenagers.

preg_amy · January 2010

We both do and we also have a small policy for DS. We got it through our financial planner, who shopped around for the best deal for us.

We don't have a lot of extra money at the end of the pay period, but we do feel that it's important to have that extra security. I SAH, DH's insurance policy at work sucks. DH's is a lot higher than mine because he makes way more money. Our financial guy told us that it's important to take out a policy on DS in case he develops any conditions that would make insurance companies reject him in the future. That way, he's already got the policy and can expand on it.

Lisa419 · January 2010

I think it is important, the peace of mind is so worth it - you can get a very large amount of term life insurance for competitive rates if you are young and healthy.

Mia Wallace · January 2010

I definitely think that you should have life insurance when you start a family. As gloomy as it sounds, you never know what will happen and you need to ensure that the remaining spouse and children will be taken care of.

We actually have a large amount of life ins. We could pay off our mtg, funeral expenses and live off of the remaning balance for many years.

Neukim · January 2010

I would shop around. I have a 500,000 policy on myself, plus a 10,000 on any kid I have for $28.00!!

I think it's an important piece of mind. It would cover all our debt, plus college for our kids

Alex26 · January 2010

We have life insurance. We bought it a month or so after DS was born. We each have $200,000 coverage. I pay $45 per month, DH pays a little bit more. The reason we chose that amount is because we figured that if one of us dies, $200,000 would cover half of what our mortgage is.

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