Life insurance question.

SurprisePartySue · January 2014

So my husband and I have been interested in getting life insurance since we will now have Emrie. I'm 25 and he's 27. How much of a policy should we each get. We got quoted for a $300,000 policy (each). Is this too much, too little? Opinions please!

CamrynnsMommy · January 2014

Following. Also how much will you get per child?

DH and DD2 now qualify for life insurance.

pandadair · January 2014

Not getting any for the kid. As I understand it, the only reason to consider that is maybe to cover funeral costs, but other than that it's not like you need to replace the income of a child. For the two of you, I'd always heard at least 10x yearly income, because if something happens, you will all of a sudden need to cover childcare, child expenses, mortgage/rent, saving for kid's college, etc. on just one income.

spinsoffresonance · January 2014

I think it depends a lot on how much you make, how much debt you have and the COL in your area. We went high. We have 1.5mio on DH, 500k on me and 250k on DD. DH wanted me to get enough to pay down the mortgage and to pay for college tuition for the kids, which is estimated to be as high as $500k/year by the time our kids are in college. He didn't want to make any money off me, so my policy is for him to have enough to pay down the mortgage. I don't really agree on having a policy on DD, but DH really wanted it as a means of savings for her (it's a whole life policy, ours are term life) we will give it to her when she turns 30 to kick start her retirement. Once I get a job and have my own salary I will switch my policy to whole life as well.

SurprisePartySue · January 2014

No not for the her. Life insurance on me and my husband. In case something happened to one of us.

pandadair · January 2014

MeaganStringer said:

No not for the her. Life insurance on me and my husband. In case something happened to one of us.

Only other reason to insure the baby is if you know major health issues run in the family and you want to guarantee that she qualifies for life insurance down the road when she needs it. Other than that, at least 10x yearly earnings for each of you.

KateBee · January 2014

We were recently quoted for Joint Universal Life by State Farm - $200K and $500K.

megmegs · January 2014

We have 10x income on both of us.

talkthewholetime · January 2014

I think we need to up ours (again).

I have some through work- not much. DH has enough to pay off our house & other debts.

mrspopsicle · January 2014

We have about 10x income on each of us and the max DHs work let us take out on DD. I don't remember what the exact amount is. Of course no one wants to think about something happening to their child, but I think it is important to have life insurance on them as well. What if they had a long illness with a poor outcome? Hospital bills you can't afford would add serious insult to injury.

flowerx2 · January 2014

I have 4x my salary. DH has 7x his salary. I plan to get LO a small whole life policy. My parents did this for me and I am very thankful I had that since for awhile I couldn't afford much while in college in terms of life insurance. Now I just rolled it into all my other policies. If I wanted I could get even have the policy pay for itself each year since I have had it so long. So I am for sure getting LO a small policy ($20,000 or so).

dogsombrero · January 2014

DH and I each have 1 mil. 20yr term. We own our own business so we felt the need to get key employee insurance on ourselves to cover our business, pay off our mortgage and cover college. If we both go out together Thelma and Louise style DHs awesome sister gets our child(ren) and the funds go in a trust after our business and employees are taken care of.

RedInLove · January 2014

We picked up policies through our bank/insurance company when DH got out of the Army. They suggested having a policy that covered the value of our home, so that's what we did. We haven't changed that since. I might have DH check and see if we should increase the policies now that we have a baby on the way. We will be drawing up a formal Last Will and Living Wills after LO arrives along with appointing guardians for her, so I will have DH look at this as well, and update our beneficiaries as needed.

naflmj · January 2014

It depends on your expenses. We wanted enough to pay off both our mortgages plus a little extra. Some people like enough to give their kids for college. We both have a whole life and term insurance (which will be converted to whole before the term is up).

sweetky_06 · January 2014

We each get 2x/salary through our employers. We each bought 20 year term policies that are about 8x/salaries to get the recommended 10x salary. We are on track to be "Self-insured" in 20 years (have more assets than what we would insure ourselves for) so we did not go with a whole life policy.

If something happened to one of us, there would be plenty to cover child care costs for years and years, fund college and pay off the house. If nothing else - it would give the remaining spouse years and years to figure out what to do without having to make decisions, like selling a home, immediately.

We have no insurance and do not plan on insuring our children. We could cover funeral costs on our own. Only 15% of people insure their kids - I personally would rather put the money into a 529 or savings account for them.

bcnoelle · January 2014

DH and I both are equal breadwinners. We have enough to cover all debts (mortgages, student loans, business loan) plus a little left over is one of us passed. If both passed, we have enough to do that and leave $1,000,000 in trust for kids and their expense to whomever would raise them. I believe we each pay less than $350 a year to do this.

chillypenguin · January 2014

We only have 4.5x my salary life insurance (through my work). DH has a higher amount through a private policy. You could also look into child life insurance through an employer. I had always declined, but my friend lost a baby unexpectedly at 10 months old last year, so I added coverage for DD at open enrollment. It only costs $1 per pay period for $15,000 coverage. It made me feel slightly sick to click that button, but if we had a horrible, tragic situation, the last thing I would want to worry about is hospital bills/ funeral expenses.

dragossoul84 · February 2014

Depends on your expenses we cannot get insurance on my DH which is really scary since he is currently our bread winner. I believe that they suggest 10x your salary.

danabsd · February 2014

H has a policy from work and the VA it's high. Mine is lower. And we have a small policy on Beb 20k, I think.

Veggiemama85 · February 2014

I'm a life insurance broker. At the very least, I'd recommend covering all debt. Then take in to account living expenses and wishes (college tuition etc). It's important for SAHM or SAHD to also have insurance because even though they aren't bringing in an income,if they were to unexpectedly pass, their duties would have to be covered (child care, house keeping etc). 10x salary is a good recommendation but can be expensive. Get as much as you can afford. Keep in mind that insurance proceeds pass tax free, not the case when "self insuring" insurance helps protect your assets. PM me your email address if you have specific questions.

jenb_99 · February 2014

Well, the idea behind life insurance is to replace the income your family loses when they lose you. If you make $50k/yr, a $300k policy leaves your family with income for 6 years after you die. If you make $100k/yr, you're leaving your family with only 3 years' worth of income. Don't forget that they'll be responsible for your funeral expenses, your debts, and whatever portion of your medical bills your health insurance doesn't cover.

The more life insurance, the better. And when you're younger and healthier, the larger amounts cost less, so it's best to take advantage while you can.

(I'm a licensed agent.)

ETA: Also everything @Veggiemama85 said about non-income-earning parents. That's super important.

CamrynnsMommy · February 2014

@veggiemama85 @jenb_99

Do you recommend insuring children, nothing extravagant, just enough to cover funeral expenses?

jjtyler · February 2014

Personally....We've done a million each (pay off the house, debts, and be comfortable for a bit if we die an untimely death). As for the child....I couldn't. I should. But it felt to dark.

jenb_99 · February 2014

@CamrynnsMommy Yes, definitely. Children have no income to replace, but you do still need to cover funeral and residual medical expenses, plus anything you want to do in memoriam (for some bereaved parents this means immediately trying for another child). You can usually add a child rider to your policy for less than $10/mo.

Veggiemama85 · February 2014

CamrynnsMommy said:
@veggiemama85 @jenb_99

Do you recommend insuring children, nothing extravagant, just enough to cover funeral expenses?

@camrynnsmommy I find that most people insure their children if there is a chance they will become uninsurable in the future due to health issues that run in the family. Other people buy universal life insurance as a savings vehicle for their child. I personally will not be insuring my child.

ABColeslaw · February 2014

We have enough to cover paying off our house,cars, debts, and childcare for 5 years.

IBackBevo · February 2014

We have about $500k on DH, but that is nowhere near enough. I don't know about 10 times yearly income, though. That would be a huge policy on my DH.

delatl · February 2014

We are just in the process of setting up policies for both of us, about 10x income for both. It seems like a huge amount of money but then, if something were to happen to either one of us, we would need it. We aren't taking anything out on the baby but will start a 529 when she is born.

Life insurance question.

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