How much life insurance?

posted 6 months ago in Finances
  • poll: For dual-earning couples, how much insurance do/did you have on the higher-earner, BEFORE kids?
    1-2 times salary : (7 votes)
    27 %
    3-4 times salary : (5 votes)
    19 %
    5-6 times salary : (7 votes)
    27 %
    7-8 times salary : (1 votes)
    4 %
    9+ times salary : (6 votes)
    23 %
  • Post # 18
    Member
    670 posts
    Busy bee

    LittleByLittle : Yes, we both did separate policies through the same provider. We shopped around and ended up going with a company I already had a policy with for something else. We chose based on company reputation and my gut feeling from meeting with our rep (I actually went to the first meeting with my mom as DS couldn’t make it and she also gave her thumbs up). The process was more invasive than the standard (they wanted blood, urine, weight, an hour long questionnaire) but they were the cheapest and ended up giving my hubby a discount because he was above average for his health and age. My policy ended up being a little more expensive because I had to mark that I was a smoker. I’m not, I just had a wild night a few months prior where I had a few puffs of a cigarette and my policy specifically considered anyone who touched tobacco in the last year to be a smoker.

    Also, we ended taking the approach we did because of an incident that happened in my family. My dad makes about 3x what my mom makes. They had a super small mortgage (about 20% of what their house was worth) and no other debt. Because my dad has 2x his salary insurance through work they decided not to renew his separate life insurance. A few weeks later, my dad went in for scan to check on something and they ended up finding what they thought was stage 4 cancer. While specialists were running more tests, my parents thought out scenarios about what life would look like for my mom. What they wanted vs what they planned for was very different and quite a few scenarios led to selling the house. They found just because your house is paid for the other person still needs to pay for living expenses, the property taxes, basic utilities, maintenance etc. There are a lot of expenses aside from just mortgage/debt payments. He ended up not having cancer and it was just a huge scare but it definitely gave me something to think about. 

    Post # 19
    Member
    7425 posts
    Busy Beekeeper
    • Wedding: June 2013

    clovesa2015 :  I had never considered the scenario of what actually happens after a spouse died beyond paying off the mortgage. I absolutely would want to move back to my hometown and it is unlikely that I would find a job that pays as well as the one I have now and the cost of living is higher. Stuff I have never thought about. So thank you for your post, we are looking at taking out additional life insurance tonight.

    Post # 21
    Member
    7918 posts
    Bumble Beekeeper

    LittleByLittle :  pre-kids we were woefully under covered (only had what was the default at our employers), but now we have a million each on a 20 year term which is just about 10x our salaries. 

    Post # 22
    Member
    604 posts
    Busy bee
    • Wedding: September 2012

    LittleByLittle :  we are also Dave Ramsey fans so we went with 10x our salary like he recommends.  We actually did a little more than that for my husband, who is the higher earner and also had massive student loans when we originally purchased life insurance.  We since have paid off the student loans, bought a house (with a large mortgage), and had 2 kids.  I think the amount we originally took out on my husband is still adequate, but I’ve mentioned lately that I want to get more on me.  My husband travels a lot for work (like 50%+), so if I died, he would either have to find a new job, or hire some sort of live-in nanny, either of which would be very costly.  He would also probably want to hire a cleaning person, lawn care/snow removal, etc.  I recently got a raise, so the amount we have on me is now only 8x my salary, so I’m thinking about getting at least another 50% of that!  

    Post # 23
    Member
    120 posts
    Blushing bee

    We both are in law enforcement and have children. We got the absolute max possible under both of our insurances. So I’m covered under my policy AND under his, plus we purchased supplemental policies.  Our thought process was it’s a real possibility one of us will die at work and if so the other will quit that career because we wont put that stress or worry of losing another parent on our children.  Money will pay off house and give us time to find another career.  

    Post # 26
    Member
    120 posts
    Blushing bee

    LittleByLittle :  I appreciate your kind words very much!   Our departments pretty much make it impossible not to face the truth though too.  Haha. Every year we have to fill out a new death notification sheet.  Says who will go to your house to notify family, who remains with your body, where to take your body etc etc etc.    Husband has been notified about me twice already getting taken to the hospital, thankfully I’ve never been about him!!   I wish we planned for long term disability issues!! We never thought about injuries that could prevent us from working, which can happen to anyone from something as simple as a car accident!  So that would be my recommendation to add to your discussions. I am facing the possibility of.losing my job right now from an injury I sustained at work. Recovering from second surgery now and I’m kind of in a 50/50 wait and see situation.  Good luck to you guys and thank you again!

    Post # 27
    Member
    10704 posts
    Sugar Beekeeper
    • Wedding: City, State

    LittleByLittle :  

    You’re young, and it’s cheap for you, even beyond what your employer offers. As you age, or if one of you should develop an illness that insurance companies don’t like, your rates can shoot up.  Or, you can be declared uninsurable.

    When there are children, you really have to do this thing big.

    Insurance is definitely not my field of expertise, but I have seen people suddenly become bad risks or age out.

    The PP is right, employer policies are generally cheap.  

     

     

    Post # 28
    Member
    9812 posts
    Buzzing Beekeeper
    • Wedding: September 2013

    We are both 35 with a 2.5 and 5 year old.  I have a $500k policy that ends in 6 years ($23/mo) so it’s on my short term list to get a new 20 or 25 year policy (maybe $750k-1mil).  I also have $500k policy through work that is pretty cheap (like $7/mo or something).  I have LTD through work. My husband has a lot through a few different policies but not all of it would be available for me/the kids (so where I would not be primary beneficiary).  I think we have around 1.5m for me/kids.  He does need LTD with is also on my list for him to do…ugh.

    If you are going to have kids and are already late 30s I would get one now for 10x your salary to last through at least 20-25 years maybe. Look at what your employer has.  FYI rates are NOT always cheaper, sometimes they are similar to a standalone policy so in that case I’d prefer the standalone one.  But I would still prefer a standalone one that is not tied to a job.

    We didn’t have life insurance (other than mine through work) before kids as I ended up like 12 weeks pregnant at our wedding.  So after I had my first we got our policies.

    LittleByLittle :  

    Post # 29
    Member
    9812 posts
    Buzzing Beekeeper
    • Wedding: September 2013

    LittleByLittle :  also agree with thinking about care for kids and the house.  If something were to happen to me my husband would have to hire a decent amount of help to maintain the kids/house like a full time nanny (what is that $35k a year??)

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