Guardians and Life Insurance

Huahine · March 2012

Learning yesterday afternoon that a friend died the night before in an accident, leaving behind a child and pregnant wife, has my husband and I realizing that we need to get our acts together and pick guardians for our child. We have wills that pour all of our assets into trusts for LO if we die, but they were done years ago before we had him. Now we need to figure out who we want to raise him should we both die.

Have you chosen a guardian or guardians for your little ones should you both pass? Who did you choose and why? How did you go about asking them?

How about life insurance? It is more likely that only one parent will pass away at once, rather than both. But even if only one parent dies, it usually leaves the other in a tough financial situation. Have you bought life insurance? How did you choose the policy you chose?

sweetky_06 · March 2012

Guardians: my sis and BIL - it was a no-brainer for us as they are wonderful parents to their 2 LOs and I just asked her over the phone. We're already named guardians for their kids so I think they were expecting it.

Life insurance: 20 year term policies, each of us have about 7x our income, plus work provides us each with 2x our income. I wanted to make sure that the surviving spouse could continue to live without having to make big financial decisions, like selling the house - right away. This amount of money would pay for a nanny, fund college, pay off the house, etc.

SoonToBeMsP · March 2012

We are working on our will now. I hate that we didn't have one in place, even being homeowners for the past five years!

We chose our guardians based on how we think they'd raise our DD. We looked at lifestyle (outgoing vs homebodies), whether they had kids already and "knew the ropes", and a bunch of other things. We just talked with all the people we were considering and asked if it would be alright. (FWIW, no one said no.) Let them know our plans, and that was it.

We have had life insurance on both of us for about 7 years, and it's quite a large amount of money (as in pay off all our debt and we could stay home, if necessary, for a couple years). We chose our life insurance based on our current situation. They try and sell you whole life, but we bought term since we wanted something as a "just in case". We didn't see a reason to spend hundreds of dollars a month for something that likely won't happen. And when we're 50-60 and doing well financially, have a paid off house, etc, we won't need as much insurance, so we can transfer it to whole if necessary.

namara5532 · March 2012

We have not written a will yet, but we need to. We've already decided that my parents would be first choice for guardians. They are the most financially well off in both our families. If they've already passed, DS would go to DH's sister. Her lifestyle most closely matches the kind of home we'd want DS to grow up in. If we can, we want to make sure DS doesn't go to FIL. He's the complete opposite of what we'd want in a guardian.

michelle_1221 · March 2012

DH is actually fasting this morning for his physical for life insurance. He's doing term through work (sure this might not be the best option, but we did research it to be make sure the company was rated ok).

We are also working on a will. We unfortunatly don't have appropriate family, so we're trying to figure out what close friends we could pick. It's a big what if, but even a big responsibility in the event something happened. It will be different than her god parents, so I some PO'ed family if we both die!

raefre · March 2012

We have unofficially chosen my little brother to be guardian, because his child-rearing, religious, and political leanings are as close to ours than anyone else. Besides, my mother has cancer and my dad has heart issues, I don't trust MIL or SIL2 or SIL3, SIL1 would be acceptable (for same reason as my brother) but her husband is a jerk. After DH and I talked about it, we then asked my brother if it was ok. I got the name of a lawyer in town but I need to set up an appointment.

I have a policy for 1.5x my income through work. My parents also have a whole life policy out for me that allows me to increase the amount for life events. It is not very big though, maybe $125k? I need to talk to my dad, who is an insurance broker. Because I am the main income earner in our house (DH is a SAHD), I want DH to have one whole life policy to cover his funeral costs and potential medical costs. I should also get a term policy to cover childcare costs as well.

For myself, I want the same type of whole life policy, by either taking advantage of the policy I have or getting another one. As for term, I want a policy that would cover the remainder of the house as well as enough to pay the bills and DH's college education until he graduates and gets a job.

But, I still haven't bought life insurance yet and am sure my dad will lead us in the right direction. These are just my ideas of how I want to buy our insurance, although it may not be right.

One estimate I have heard is to get enough insurance to cover your income until your kid leaves home, so if you earn $50,000, then you would need $900,000.

lp0 · March 2012

I have a basic $50,000 life insurance policy but dh is 5x his pay. The thought behind it was if something happened to me, dh could still work. I am a sahm so if something happened to dh, we'd be in trouble. We haven't officially chosen a guardian but think it's going to be my brother. He is gay and does not have kids of his own. He is 12 years older than me and practically helped my mom raise me. He is amazing with kids and while his social life would need to calm down drastically he already agreed he would have no trouble doing that if it ever came down to it. I've tried talking about making a will and naming a guardian with dh but he avoids the conversation. He never worries about anything. Also as pp mentioned I'd like to see if it's possible to ensure mil would not get ds if for any reason my brother couldn't do it after all. When we were talking about god parents (which my brother is ds's god father) it came up in conversation and her exact words were she would "throw down" to get ds. She is crazy and under no circumstances would she ever get ds (DCF would never allow it anyways as she has mental issues and her house is unsafe bc she is a hoarder). I'd like to put it in our will to save everyone the hassle this crazy woman would definitely bring.

space629 · March 2012

Guardians: My parents. We chose them because they are still fairly young (my mom is 47 and dad is 56). My ILs are older and my FIL is disabled, so caring for a young child is impossible for him. I have 2 sisters but i don't see either of them as suitable parents for my children. I also don't want my children raised by people outside my family.

Life Insurance: I have a policy on me through work that is 1.5x my salary. We just bought DH a 30 year Term Life Insurance policy for $300k, enough to cover his funeral costs, pay off the house and other debt and put money in a college fund for DD.

denisemancini98 · April 2012

You should include healthy-sized life insurance policies in both of your financial plans. As a SAHM, don't undervalue yourself. It may actually take a whole lot more money to replace you and the myriad of jobs you do, as compared to DH and his income. Term life insurance bought independently between 8 to 10 times an annual salary (or value contribution) is usually recommended. Look up AccuQuote cheap term life insurance quotes, whole life (should you find the need for it) and several other types of life insurance quotes are available on there for free. Good luck!

Denise Mancini
Disclaimer: I work for AccuQuote and this is my personal opinion.

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