Ok not to have life insurance?

[Anonymous]

Early 40s. We have a reasonably high NW (3ish M) with very little of that from our house and an income of around 600-700k. Our debt payments are very low as a percent of income around 7-10%. I have 2 yrs cash salary (which is much lower than my annual comp) life insurance policy from work. My spouse makes much less than me and has some through employment, too.

Does it make sense for both of us to have life insurance or just me?

[Anonymous]

OP,

In your situation I wouldn't get a life insurance. We are around $3.5M NW and kids 15 and 12, we just have life insurance from our corporate jobs. We feel okay not have any additional term insurance. Kids don't need day care, and I earn $250K and DH $500K, if anything happens to either one of us, we can easily manage house hold expenses on one income. Our mortgage is reasonable (or low) for our HHI .. PITA $3K.

[Anonymous]

Anonymous wrote:Early 40s. We have a reasonably high NW (3ish M) with very little of that from our house and an income of around 600-700k. Our debt payments are very low as a percent of income around 7-10%. I have 2 yrs cash salary (which is much lower than my annual comp) life insurance policy from work. My spouse makes much less than me and has some through employment, too.

Does it make sense for both of us to have life insurance or just me?

Just you.

Can your spouse max 401K on their salary alone and still maintain current lifestyle with kids EC, vacations etc? If not, then get life insurance for you. I am assuming that you can maintain your current lifestyle without your spouse's salary. The $3M will continue to grow and will help pay for college and retirement for the surviving spouse.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Since we are older now, every year I think I'll drop the life insurance. Then I think as soon as I drop it that will be the year one of us dies and will wish we still had it. Not that we would need the money to survive but it would be nice to have for the surviving spouse after all those years of paying for it. So I keep paying it every year.

Sunk cost fallacy.

No PP but I think there is a different logic to it. I have term life and am close to the end of a 20 eyar term. My premium is quite low at this point, and my risk is of course much higher since I am over 60. So it makes sense to pay the low premium because there is sadly an increased chance of my DH actually being able to collect.

We will drop DH's term policy this year because he doesn't earn that much and I don't need the income replacement. We will drop mine when the term expires in 2 years because even though I am a high earner we are set for retirement and DH can live well without my annual income.

[Anonymous]

Anonymous wrote:Early 40s. We have a reasonably high NW (3ish M) with very little of that from our house and an income of around 600-700k. Our debt payments are very low as a percent of income around 7-10%. I have 2 yrs cash salary (which is much lower than my annual comp) life insurance policy from work. My spouse makes much less than me and has some through employment, too.

Does it make sense for both of us to have life insurance or just me?

Both of you. Imagine a scenario where your DH dies and you have to downsize your job to spend more time with kids, etc. How will that lost income be replaced?

[Anonymous]

Anonymous wrote:Early 40s. We have a reasonably high NW (3ish M) with very little of that from our house and an income of around 600-700k. Our debt payments are very low as a percent of income around 7-10%. I have 2 yrs cash salary (which is much lower than my annual comp) life insurance policy from work. My spouse makes much less than me and has some through employment, too.

Does it make sense for both of us to have life insurance or just me?

We think everyone with dependents should have life insurance even if stay at home. You would have to cover the cost of care for the dependents if that person dies.