Life insurance, do you have it? If so what kind and with who?

bmo88 · January 2015

Sorry for all the questions today!! Our 2015 goal is to get our financial house in order and one of those things is to look into life insurance. At the moment, we don't have any and we are weighing the benefits.

We are both young and healthy (26 and 28), no children. We own a home and we have stable incomes. In the event something were to happen though, it could put one of us in a tighter financial situation.

I was looking into Fidelity for a 10 year term life insurance policy and it would be $121 per year for $250,000 of coverage. I have no idea if that is a good quote or not. I am looking into a few other companies/options.

I am curious to know what others do and who they have policies through.

ETA: We do have basic policies through our employer that cover $15,000 (for burial expenses).

als1982 · January 2015

Hi again! We don't yet have kids, but are planning on TTC this year, which means we're shopping around for this too. We can afford our mortgage and bills on one income (we make essentially equal amounts), and have small policies through work that would cover any burial expenses, so we elected to not purchase this until right before we have children.

You most definitely need longer than 10 years, I would say at the very least 20 years or until your youngest child is out of high school. Also, $250K seems really low. It's recommended that you purchase a policy that totals at least 10x your annual income.

bmo88 · January 2015

als1982 said:

Hi again! We don't yet have kids, but are planning on TTC this year, which means we're shopping around for this too. We can afford our mortgage and bills on one income (we make essentially equal amounts), and have small policies through work that would cover any burial expenses, so we elected to not purchase this until right before we have children.

You most definitely need longer than 10 years, I would say at the very least 20 years or until your youngest child is out of high school. Also, $250K seems really low. It's recommended that you purchase a policy that totals at least 10x your annual income.

I was just reading an article that mentioned the 10x the annual income. When I adjusted the quote it recommended a higher coverage and a premium of $26.00 a month (which still seems reasonable).

formerlyGDaisy09 · January 2015

H and I both have policies through our jobs, mine is enough to cover all debts including our mortgage with about $10k left to cover any additional end of life/funeral expenses. H's job doesn't offer as good of coverage, his would cover all debts but our mortgage, mortgage payments are less than half my monthly take home, so without other debts I'd be ok... If my income increases I can stay, if not I'd have time to sell the house.
We're starting to TTC part way through this year, we may shop for some more robust coverage for H

Xstatic3333 · January 2015

We each have about 8x our income in 20 year term policies. More is recommended, but in our case this would pay off the house, the survivor's SLs, and leave about a $100,000 nest egg, which we're comfortable with. We have really similar incomes.

We're with Liberty Mutual, but I can't recommend them (though I can for home and auto). The approval process was long and difficult, and I was bumped down a health rating for fainting once 12 years ago (hungover in college, tbh) with no subsequent issues. I also teach SCUBA, and there was a lot of ridiculousness connected to that from underwriters who know zip about the sport's safety practices. We pay around $60/month between us, but better rates are out there. I'd be shopping around except the whole process was very emotional for H and I don't want to go through it again.

smerka · January 2015

We pay $120 a month for 1,600,000 in 20 year term with Northwestern Mutual. We are in a very different situation though. We are 41 and 42 and I SAHM with two boys who are 4 and 5. We got the policy 5 years ago so it will expire when the kids are in college. Instead of the 10x your income, you might just want to stick with paying off your debts. The situation changes dramatically when kids come into the picture, but you can always buy a new policy or change the one you have.

CuriousKiddosMama · January 2015

We both have term life insurance. We got a 20 year term 10x dh salary for him, and $400k (roughly what used to be 10x my salary) for me. If anything happened to either of is, it would buy us time to take time off work for him, for me to find a job and pay off the house. We are planning on more than1 kid, but figured a 20 year term would be long enough because by then we should be debt free again, have college funds saved up and be self insured.

MommyLiberty5013 · January 2015

I have $330k. DH has $1.5M. I am a SAHM. He is the sole breadwinner. We have kids 18 months, 3 years, and 5 years.

To decide in the best amount for you, you also have to consider other assets. Retirements, homes, cash on hand, plus families.

By some standards, we may be underinsured, but based on the above things I mentioned and DH's and my families "helping" if a death were to occur, we are pretty well okay.

If you, your DH or another other family member of either of you, are active, retired, or honorably discharged military (any branch), look into USAA. They typically have great rates and awesome coverage.

vlagrl29 · January 2015

we have $250,000 on each of us and they are with Genworth. I am 34 and DH is 39. Mine is $75 every 6 months and his is $82 every 6 months. When I'm pregnant with #2 I will want to up DH's to $500,000.

Erikan73 · January 2015

Husband and I both have policies through work, but if anything ever happens and we didn't have our jobs, we would lose our life insurance. We can't have any kids so we only have each other to worry about. I do have my own individual Life Insurance Plan outside of work, but due to health reasons, husband was denied. We're working on improving his health so that he can reapply at a later time. I know my work one is twice my annual income, I think hubby's is a little more. My individual one is $200,000. Our plans aren't enough so the other is "set for life" but it will pay off the mortgage & funeral expenses which will make life easier then.

MommyLiberty5013 · January 2015

Erikan73 said:

Husband and I both have policies through work, but if anything ever happens and we didn't have our jobs, we would lose our life insurance. We can't have any kids so we only have each other to worry about. I do have my own individual Life Insurance Plan outside of work, but due to health reasons, husband was denied. We're working on improving his health so that he can reapply at a later time. I know my work one is twice my annual income, I think hubby's is a little more. My individual one is $200,000. Our plans aren't enough so the other is "set for life" but it will pay off the mortgage & funeral expenses which will make life easier then.

You can check with your HR departments and your life insurance companies. Many times, if you leave your job, you can still port your LI policies. Therefore, the policies wouldn't end. Typically you have to pay more out of pocket for them because you don't have the benefit of the employee group that once existed lowering your payments, but the policies usually stay intact.

Before I was a SAHM, I worked for a large bank. My $330k LI policy is the one I ported when I left the bank to SAH. As an employee I paid about $0.75 per paycheck for it. Now, I pay about $45 every quarter out of pocket. So, my cost went up when I left the bank, but I kept the policy. The bills for it just come to the house instead of being deducted from a paycheck.

You may wish check into this - not that you're planning to leave your job, but just so you know what the options are. If you're informed early in the game then if something were to happen, you won't have to go into scramble mode.

hoffse · January 2015

How much you need depends on how much debt you have, whether you have kids, your earning potential, etc. It's different for every person.

H and I each have $750K. We each have $250K provided by our jobs - we pay taxes on those premiums which amount to about $35/year. We also have independent insurance at $500K. My premiums are $153/year and H's are $174/year for that amount. He is 27 and I am 28. I can't remember what the term is - probably 10 years because we plan to change it once we have kids.

We keep this much because we both have serious law school loans, a pretty significant mortgage, a car loan, and we would want to be able to take a leave of absence from our jobs and have a serious nest egg for the future. Most of our law loans are actually through my parents, and each of us would feel the need to pay off the other's loans to them in the event of death. If I died tomorrow, H would not feel like my debt to my parents had been discharged. So he needs enough to pay my loans, his loans, and then our mortgage and car loan.

If/when we have kids we will take out more.... enough to cover childcare and private education from kindergarten through college. This is something that's important to us, and we both have a high earning potential. Losing one of our incomes would be a serious blow to those plans, which is why we will buy more insurance once we have kids.

Do take out term life insurance. At a certain point you should be self-insured and will no longer need life insurance.

smbenevides1989 · January 2015

I just did this back in September. DH and I go through Amica Life Insurance. I have some medical issues and pay $49/month for a $500,000 LI plan for 30 year term. I'm 25. H is a healthy 25 year old and pays $32/month for $500,000 LI plan for 30 year term. We have two girls and some debt.

We chose to each have that much to pay off any remaining debt, purchase a home to live in with the girls (we currently live with my family as we save up for a home), pay for burial costs, save up college expenses for the girls, and build a little nest egg for anything that could happen in the future. We felt much better knowing the girls would be taken care of if anything were to happen to either of us.

strickland8052 · January 2015

We are 26 and 29 with no kids and no debt except the mortgage. We make about the same salary. One salary goes towards the mortgage and the other salary goes towards bills and a significant amount of savings (for our income at least). If one of us were to die, the other would be fine as long as they didn't have to worry about the mortgage. With that, we figured that we really only need enough to cover the remaining owed on the home. We also would need another $15k to cover funeral expenses. That estimate puts us at only needing about $200,000. However, we actually have a lot more, because our employers offer a good bit for pretty cheap (so... why not?). We only have the policy through our employers.

When we have children, we will probably reevaluate and up our amount a good bit. We might also choose to buy a policy outside of our employer, just in case one of us leaves our jobs.

When we get older and have more in savings, we will probably reevaluate again and decrease the amount. For that reason, I'm a believer in term life insurance.

brij2006 · January 2015

We have a 25 year term policy through Protective Insurance. Each of us carries 10x our annual income. We bought these through an independent insurance agent who had multiple companies to choose from.

I actually sell life insurance as part of my job (term only, because we believe whole life is not worth it), and we recommend 10x your income to start. The reason for that is that the spouse can take that amount and put it into a mutual fund if/when you pass away. The annual earnings from that money in the mutual fund, would equal pretty close to what that person was bringing home each year, and the spouse could pull that out as "pay" annually. This is especially true for SAHM's. We actually advise the husband has more coverage than 10x, if the mom would like to continue to stay home or only work part time if something were to happen.

My husband and I are 26 and 28, and we took out the 10x our income. We are due next month with our first child, but will not take out any additional insurance because of it. We still have a mortgage (55k), student loans (25k), and car loan (15k) that we're working on heavily to get rid of. So within the next 2 years we will be debt free except for our house. We feel that will help us more financially, than having an insane amount of life insurance, because then we can begin to build wealth within retirement that the spouse can use if needed. It will also put us into a position to where we could afford to survive and raise our family with only 1 persons' income if one of us were to pass away, since we would only have the mortgage left.

Life insurance, do you have it? If so what kind and with who?

Re: Life insurance, do you have it? If so what kind and with who?

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