Life Insurance?

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Sina

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Do you have life insurance? Why or why not? Is it just a money grab from the financial institutions or is it really important?

What if you and your spouse make the same amount of $$ and either of you could afford to get by without the other if one passes away?
 
We got life insurance at a time when I was a SAHM with 3 kids. It was very important to be covered in case anything happened to one of us.

Today we have a house and we are both insured so that if either of us dies the house is paid off. I only work part time, earning 6x less than DH, so if I dropped dead without insurance it wouldn’t change anything in his financial situation. I can’t say the same thing.
 
We have insurance to payoff the house and to help supplement daycare for the single parent that is left.

As one of the financial guys on the radio here says. I want enough insurance so that my wife can be choosy over the next guy she marries and doesn’t feel she needs to marry someone for money.
 
I am the sole financial provider of the family. My wife is a SAHM, and my son is young. It would not be prudent for me to be without life insurance.
 
I have life insurance and I would recommend that both you and your husband get it. What would happen if both of you died? Wouldn’t you want to know that there was something for your children?

Also, what if you were to end up having quite a few children, more than you would be able to support on your own? It is a good idea to go ahead and get the coverage while it is easy to get, when you are young and healthy.
 
It is the responsible thing to do. It’s only the two of us with no children, but if either of us were to die, at the VERY LEAST we would want to cover funeral expenses - it costs about an average of $7,000 for a marginal funeral these days. Not something most people can just pull out of the bank, or would want to have to. And we also want to ensure the other person is not burdened immediately with having to handle household expenses when income has been slashed in half. Or in our case, if I died, it would be more than that. DH works for a non-profit, so I make more than he does. I would never want to leave him with the burden of the house and everything else that goes with it. It’s only being responsible.

Now - it would have been interesting if your poll asked if people have whole or term life. THAT would be interesting to see as well.

~Liza
 
Hmm as someone who doesn’t have life insurance ( cept that work will give my DH something like $80,000 if I die + my pension ) I didn’t know anything about it - hence the blah poll options 🙂 Wish I could change it! Hope people comment.

Even though I have one child on the way, and DH and I make roughly the same, I am having a hard time anticipating our future. I THINK I am going back to work after a year of maternity leave… but then obviously there will be more kids down the road if I am so blessed. We have good finances… I just don’t want to waste $$ on pointless insurance. I HATE insurance ! I just thought all the mortgage companies and banks make their money off people by selling them insurance.

🤷

Keep up with the comments! I am learning lots.
 
Sina said:
Hmm as someone who doesn’t have life insurance ( cept that work will give my DH something like $80,000 if I die + my pension ) I didn’t know anything about it - hence the blah poll options 🙂 Wish I could change it! Hope people comment.

Even though I have one child on the way, and DH and I make roughly the same, I am having a hard time anticipating our future. I THINK I am going back to work after a year of maternity leave… but then obviously there will be more kids down the road if I am so blessed. We have good finances… I just don’t want to waste $$ on pointless insurance. I HATE insurance ! I just thought all the mortgage companies and banks make their money off people by selling them insurance.

🤷

Keep up with the comments! I am learning lots.
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Probably you should look for Term Insurance and not trying to use it as an investment. Mortgage companies and banks sell annuities that are used as life insurance and vice versa. Those forms are a big waste of money for a lot of people.
 
I used to sell it and so did dh–so yes we have it. I would advise anyone on here to have at least enough to pay for funeral, mortgage, debts…especially if you are living on one income. I will never forget a couple who visited me many moons ago when I was in the personal lines business, and I was going over potential life insurance options. They had 5 kids, and the wife hadn’t ever worked since they got married, and her husband refused to buy any life insurance. His retort to me? “Why should I make it easy for another man to come into my wife’s life?”:mad:

She came to me about a year later, and said they were separated. I know that couldn’t have been their only reason–but…I will never forget the expression on her face when he said that comment way back when. A mixture of anger and sadness washed over her face.

I think it’s very prudent to have something in place…and term is not the greatest either. If we all knew we were going to die at the end of the term, then buying term would make the most sense. But ‘whole life,’ although a bit more costly on the onset, will cost you less in the long term, and you won’t have to worry about requalifying because there are no terms of years. Just my two cents.
 
Sina said:
I didn’t know anything about it -… I HATE insurance ! I just thought all the mortgage companies and banks make their money off people by selling them insurance.
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How can you hate that which you don’t know anything about? Please take the time to research it first. I pay $14 a month for a $250,000 term life policy. If I die, it’ll make life a lot easier for my wife. I consider it money well spent for providing for my wife and children. Considering some of the things that I waste $14 on, it’s a bargain.

If you die, don’t you want to insure that your spouse can maintain your house and such as well as provide for your children? Catholic school isn’t cheap these days, and it is very hard for single parents to send a child through Catholic school, much less several children.

Banks and mortage companies generally make the most money by lending money. Selling credit life insurance is a way they make money on the side. It’s generally not a good idea (because it only pays off that loan, and the value of it decreases as the loan is paid off). And besides, a good term policy is cheaper.

A 20 or 25 year term policy is a good idea when you are bringing kids into this world. However if you are wealthy enough that the death of a spouse will not impact the lives of yourself and your children, then you can get by without it.

Andy
 
The best thing to do with insurance is to buy term when you are young, when if a catastrophe occurs, you will be covered.

As you get older, it is best to SAVE so that you don’t need insurance.

If you want to buy whole life insurance to save or invest your money, I suppose you can. But there are much better ways to do both. The only way whole life insurance makes sense is if your income is 7 figures or more and you need it for estate planning.
 
newf said:
The best thing to do with insurance is to buy term when you are young, when if a catastrophe occurs, you will be covered.

As you get older, it is best to SAVE so that you don’t need insurance.

If you want to buy whole life insurance to save or invest your money, I suppose you can. But there are much better ways to do both. The only way whole life insurance makes sense is if your income is 7 figures or more and you need it for estate planning.
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not necessarily–whole life is a good option when you’re young and the premium is low. The key with insurance is for the untimely accidents (homeowner, auto, etc) and for unexpected deaths…or even those that are expected (someone is ill for a while) Many MANY people will not have that type of money to shell out for an untimely death like a car accident, heart attack, etc…I hate to sound like the grim reaper. I guess I have been in this biz for too long. 😊 I now am on the commercial side of insurance.

Suffice to say–life insurance is not a saving mechanism. It’s there to help people in the event of a terrible loss–especially when it’s unexpected.
 
TERM TERM TERM.

That’s all you need and it’s soooooo cheap. My husband and I have a combined total of 1.2 million (800K for him 500K for me) for only 117 a month.(That includes the SGLI from the military and a term ins with no war clause, regular term should even be cheaper) Totally worth it. I’m a SAHM and want to continue to be if he should die, and I want him to be able to afford a GOOD nanny and pay off the house if I should. (Maybe a really good one and they could get married later, LOL)
 
Yes to Life AND Disability.

Disability insurance is as important as life insurance. What were to happen if you or DH gets very sick long term or injured and cannot work?

If one dies, who pays for the house, pays for childcare (if mom was SAHM), funeral expenses, medical expenses incurred that were not covered by health insurance, etc?

Ever see the fundraisers being held to raise money for families left destitute by illness or death? Disablity and/or life insurance would alleviate a lot of stress!

Life and disability insurance are extremely important. My husband has spent his whole career EDUCATING people on the importance of it. It is vital.
 
whatevergirl said:
Suffice to say–life insurance is not a saving mechanism. It’s there to help people in the event of a terrible loss–especially when it’s unexpected.
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Yes, and this is what term insurance is for. The term insurance premiums are much lower than whole life. You are better off buying term and investing the difference in mutual funds.

For the average person with a net worth of less than 7 digits, whole life is not a wise choice. Ever.
 
Again, more good advice. Andy you are right, I was being silly in saying I hate insurance when I don’t even know anything about it.

I guess insurance should be chosen based on your personal situation. I personally think $100 a month or more is a LOT to pay for life insurance. I think I will opt for the bare minimum. Catholic school is public school where I live, but I supposed college tuition will be through the roof when my kids are old enough.

I am pretty sure most employers have some kind of death benefit and disability benefit.

I am just blown away by how everyone who took this poll believes life insurance is very important! I guess I was naive. I really don’t think my parents ever had life insurance.
 
Maybe the situation is different in different countries, but in the US, life insurance generally makes sense, especially if there are children involved (either to help pay for their expenses, including education, or to help pay for childcare that a parent used to provide for “free”). Also, there is a risk in depending on an employer to provide benefits - what happens if you leave your job (voluntarily or otherwise)?
 
Nechasin said:
As one of the financial guys on the radio here says. I want enough insurance so that my wife can be choosy over the next guy she marries and doesn’t feel she needs to marry someone for money.
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This is actually something that ought to be considered. A non-working, or even a working spouse, can be placed in a terrible financial situation when death occurs. There are likely to be be expensive medical and funeral bills.

And what sounds like a lot of insurance money will really not last all that long. It’s purpose is to generate income to live on; not to spend the principal.
 
Sina said:
Again, more good advice. Andy you are right, I was being silly in saying I hate insurance when I don’t even know anything about it.

I guess insurance should be chosen based on your personal situation. I personally think $100 a month or more is a LOT to pay for life insurance. I think I will opt for the bare minimum. Catholic school is public school where I live, but I supposed college tuition will be through the roof when my kids are old enough.

I am pretty sure most employers have some kind of death benefit and disability benefit.

I am just blown away by how everyone who took this poll believes life insurance is very important! I guess I was naive. I really don’t think my parents ever had life insurance.
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Some employers offer that as a perk. It is not a lot! How far will $20,000 get you after funeral expenses, a few house payments, and miscellaneous expenses associated with the death (accident? illness? travel to transport body home?) Employee offered disability? Again, it is a percentage of the pay. Private disability is purchased to fill in the difference. Can you live on a percentage of your income? Or do you rely on most of it?

As far as your parents having it… between my DH and myself, we have over $1 million. The kids have no idea it is there. It’s never come up. Some of that is term. Once it expires, they will never know. HOWEVER, if one of us were to die, that money sure would go a long ways to help raise those kids! As someone else said, the main insurance payout is meant to remain. Wouldn’t it be great to live on the interest generated and keep that principal intact!?! Then, pass that onto your kids and give them a headstart in life. Who says everyone has to start out with zero, especially if a parent dies when they are small?

Also, insurance can be a great tool in estate planning. If a parent has a lot of property, the government can death tax the $%^& out it, oftentimes forcing a sale to pay the taxes. Life insurance provides funds to pay the taxes and allows the property to remain in the family.

Another reason to purchase life insurance while you are young…medical limitations. Most young people are relatively healthy and premiums are relatively low. Once a major medical incident occurs, your “insurability” suffers because you are a higher risk. Either you become uninsurable or your premiums become astronomical.

My DH bought a convertible term policy several years ago when he was healthy. Since then, he has had major medical issues. He is no longer insurable. However, because he purchased that policy when he WAS healthy, he is covered at the same low rate.
 
Another thing to add about relying on your company life insurance too…suppose you lose your job? Suppose you resign? That premium will cost you the real cost, as opposed to the lower cost your employer was paying for you, while being on their payroll. When I sold life insurance that was a big point I brought up–that you need additional insurance in case you suddenly become unemployed, because you will end up paying the non employee premium, if you lose/quit/get laid off from your job. And that company might not be the cheapest on the block–so you’ll have to find new insurance at your current age–and depending on how much you wish to take out, your age, health changes over the years–you might be subject to stricter underwriting guidelines, and might pay higher premium. Some companies won’t give you life insurance if you don’t have employment, either. Just something to ponder.
 
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