How much life insurance does DH need?

[Anonymous]

Given how cheap term-life is, I would get a $1.5 million policy. You would probably be fine with $1, but I bet the price difference is very small!

[Anonymous]

$1m on each of us. We have 2 toddlers. Want to make sure in case anything happens, there's enough to pay off the mortgage and have a nice cushion.

[Anonymous]

I wish I had bought a 20 term when dd was born. I have 900 k through work. Sole wage earner, 150k, 280k mortgage.

I can not buy ins any more, as I have metastatic cancer.

[Anonymous]

It's not always cheap. People with even well managed chronic diseases like diabetes basically can't get life insurance at any price.

[Anonymous]

Anonymous wrote:

Anonymous wrote:This is DCUM, so you will hear from a lot of over-insured people.

First, you should only buy term life, not whole life or any other stuff an insurance salesperson tries to sell you.

Given the $75k salary of the spouse being insured, and the $550 mortgage, I think something in the $600k range would be reaonable. That's probably the lowest I would go, but the caveat is I'm not an expert/financial planner. That way you pay off the mortgage and you can easily cover remaining expenses with your income.

If you go to $1m on your husband, that would be plenty, for sure. That would allow you to work part-time if you needed to following his death.

On your life with the higher income, I would go higher, $1m or more. If it was me. Because he would really struggle without your income.

I'm the PP who wrote the above.

Re: price for $750k policy, wish I could give you good advice but I've only bought through employers with generous benefits (prices aren't comparable to private market). If I were shopping in the private market I'd call 3-4 companies and compare. Sorry I can't help more.

Re: families with one stay at home parent, if the SAHM or SAHD for whatever reason is unlikely to get a high-paying job at a moment's notice, you need to err on the side of more insurance for a given HHI, because it is totally catastrophic when the single breadwinner dies. So for example, the DW $125k + DH $0k family needs to buy more than the DW $50k + DH $75k family, in total.

Re: insuring someone with no income, it's a personal choice. In previous eras SAH was often a permanent choice after kids were born, but now it's more often temporary. At the very least, the possibility of the SAHM/D working in the future is an important safety net. Having an educated, work-ready spouse who stays at home is like an insurance policy in itself! So it's rational to insure a non-earner these days, sometimes for a lot. The more the SAH parent's future working possibilities feature in your future plans, and the higher their earning potential, the more you should insure them.

Re: buying lots of insurance when you are married but have no kids, this again is personal. Are you young? Would you remarry? Would you stay in that big house? The reason insurance with kids is so important is that you never want your spouse to be "forced" to remarry in order to support the kids, like in the 18th century! Without kids it's really more about age, what-ifs, and lifestyle choices. And if you are single, then it depends on your parents' needs in old age, and so on.

Re: whole life and its ugly cousins... as others have pointed out, this kind of product is routinely marketed to people for whom it is a bad idea: the middle class and working class. It was invented by insurance companies trying to juice their returns and capture some of the investment market. If you are very wealthy, maxing out all available savings plans (401, IRA, 529) and ALSO making the maximum gift to your children every single year, and you need additional tax-efficient transfers to your kids before your death, then maybe whole life is an option. For everyone else, you are better buying term life and investing your money some other way, like ETFs in a 401 and IRA.

If you feel like you can't get the straight goods on all of this from insurance salespeople, go to a fee-only financial advisor.

Agreed. We have a similar situation. Term Life only. Heavily insured right now. DH has 2 concurrent policies, which expire at different times. 1st policy, because kids are younger, we have coverage for next x years, till they are out of the house. 2nd policy, continues till our retirement stuff kicks in.

My Insurance covers only the cost of funeral and nanny/housekeeper costs because I am SAHM.

DH made sure that I would have enough money to never have to work and that my money would grow even with not very aggressive investing.

[Anonymous]

Our math was simple:

If I die, without my income, what will my wife need to pay off mortage, provide childcare for our kids (as she will presumably not be able to pick up and drop off every day) well into their teens (10 years away) and pay for college, with a little cushion?

If my wife dies, without her income, same questions for me.

We ended up with $2M on me and $1M on her.

[Anonymous]

For price comparisons, you can expect to pay about 1k annually for $1.5 million in coverage guaranteed for 15 years in term life insurance. One option to consider is buying separate 10, 15 and 20 year policies as most of us have financial needs that go down over time (kids finish college, house gets paid off, etc.) Saves you a bit of money.

Previous posters who say you need whole life are either salesman or have been hoodwinked by them. Whole life's primary legitimate use is in estate tax planning, not making sure your family is taken care of in case you die.