Should we increase our life insurance?

[Anonymous]

Anonymous wrote:

Anonymous wrote:As others have pointed out, the contingency you should be planning for is one of you dying, not both. Have enough insurance so you or DH could maintain your lifestyle. I don't believe in the DCUM standard which says a parent's death should make their kid rich.

OP here. I think people's replies seemed to focus on my sister, but we did choose the insurance amt based on only one of us dying. We figured that would be enough for the surviving spouse to pay off the house, and pay for college but regardless of whether it's only one of us dying or both, I'm still wondering if we need to increase insurance now that we have two kids. I guess that's my basic question...certainly not to make my kids or sister rich!

If that's your basic question, then the basic answer is "do you think the cost of raising two kids is substantially more than the cost of raising one kid (and if you do, do you think you had enough of a cushion in your earlier insurance to cover the cost of two kids)?"

[Anonymous]

Anonymous wrote:Do not ever name someone as beneficiary if you expect that they will use the money for the benefit of someone else. You have NO WAY to ensure that will happen.

Even if you trust your sister, let me give an example. You leave a 1M life insurance policy to your sister, intending that she takes care of your child. She drops dead, and guess what-- her ne'er do well husband inherits all of it and tells your kid to pound sad--as he has every right to do.

Or, she gets in an accident and is sued and loses it that way.

really, there are tons of ways this could go bad. Don't do it. Set up a trust.

OP here. I did want to respond to this post- you make an important point! We do have a trust set up that will be administered by my sister. Our lawyer actually made the same points you did.