Life Insurance

**StartingOver** · 09-19-2007, 11:17 AM

I recently was reading on another thread "What's your biggest fear" and naturally everyone's greatest fear is losing a spouse or child. Mine included.

My question to you all is: We currently have life insurance on myself, DH and our 2 kids and we fork out a little over $200 a month for life insurance. When things are super tight each month, I have a hard time paying this bill and have thought many a times that we should drop it.

But then I really stop and think about how things are tight now, how in the world would I be able to survive if my DH died, I in no way could replace his income on my own.

People have often thought it "morbid" to put life insurance on our kids. My thought on this is.....a death of a child is tragic enough, I certainly can't imagine the financial burden of having to bury a child and dealing with medical expenses (if any).

I guess I'm just wondering if any of you carry life insurance or do you have other plans in place?

**PrairieRose** · 09-19-2007, 11:22 AM

Oh we carry life insurance. Much more on Gripey than myself b/c he is the bread winner, I'm just the cheif cook and bottle washer...

But I think it's an absolute necessity when you have a family. I know people who don't and they worry all the time.

**nodmicks** · 09-19-2007, 11:26 AM

DH and I each have a 250,000 term policy. None on the kids. It costs us under 350 a year.

The term is set to expires when the youngest is 19 years old. Since I don't make much mine would help dh to hire help and pay off the 50K left on the house.

If heaven forbid anything should happen to dh his would be enough for me to get back in school and live until I graduated with a degree in a field making as much or more than he did. We really hould have moe ins on Dh with him being the bread earner.

**always2busy** · 09-19-2007, 01:57 PM

DH and I just got a quote for 15 term life insurance that is renewable. I used to be a financial advisor. You should always buy term. Anyway our quote was 300K for DH and 150K for me for about 80 a month. We have other quotes for more insurance but that is the lowest one. If you want more info PM me.

**jamie79** · 09-19-2007, 04:44 PM

We have it on both dh and I and on both the kids. Dh has more then I as he is the breadwinner

**claimsgirl66** · 09-19-2007, 07:23 PM

Life insurance really is meant to replace that person's income should he or she die. It really should be used to cover expenses and help the living keep their lifestyle, like mom dies and and the $$ can help get a nanny, pay the mortgage, or pay for kids schooling, etc....Life insurance on children really is a waste of money, IMHO,frankly. There are better ways to invest your money. I was talked into it years ago but dropped it after a few years, and I should have known better. More likely your kids, when older and married and have their own financial obligations, could obtain their own insurance.

If someone gets term insurance well still relatively young, in their 20's, it is not too costly. So even if they wait til they are out of college, the premiums are relatively affordable. I personally think you are better off spending the money on a kids education, keeping your self out of debt, or savings account and keep up term life for you and their dad in the event anything happens, god forbid, to either of you.

If you have do not have term policies, you and DH should be able to convert your policies to something more affordable and drop the kids insurance. If you are concerned about a policy to cover final expenses, (morbid I know) look into a small term policy, $10K or something on them, so that so at least you had something in the event of a tragedy.

**became4347** · 09-19-2007, 08:11 PM

Life insurance on kids is not necessary.

Also, it's pretty obvious to me that you have some sort of whole or universal life insurance and NOT term. Term is what you want. Let me guess....some insurance salesman told you that this was an investment. Hogwash!

$200/month is outrageous. You need to drop it and get TERM insurance.

Good luck

**jamie79** · 09-19-2007, 09:40 PM

To clarify, our kids ins comes from us having ins. I think its important to have ins on the kids for final expenses if something should happen to one of them and the ins then goes to their sibling for college costs. When they turn 23 then they have to get their own

**my4littlebuffaloes** · 09-19-2007, 09:45 PM

We have a large amount on dh and myself, with 4 small kids, either way the one left would need a lot to continue. We pay a total of $700 a year for both of us. I think you might need to look into a new plan. i went through Dave Ramsey's site - and got great quotes. Without giving out too much info either. it is worth a look though to see if you can lower it. Don't cancel your old until you get a new one in place though.
jennifer

**StartingOver** · 09-20-2007, 10:13 AM

Thank you all for your input. I certainly appreciate all your advice. However, I will not change what we have.

Term Insurance VS. Universal Insurance to me is like Renting VS. Owning. What happens when your 20 yr Term runs out and then your 45 yrs old and uninsurable due to poor health or premiums are so high you cannot afford to get more insurance.

Right now we are paying "extra premium" and whatever is left is put into a account that is currently earning 8% interest, I have access to that money any time I want without affecting my Death benefit amount.

As far as having insurance on your kids being a waste of money? Wow...can't believe that one. I currently pay $10.00/month per child. Right now the cost of a funeral is around $10,000-$12,000 dollars...I certainly would not want to sit down and right a check for that.

Again think about about when your kids are college age and they are considered uninsurable because of health issues.

I guess everyone has their own opinions and not everyone is going to agree...I guess that's why they make all those different products.

Thanks again.

**nodmicks** · 09-20-2007, 06:20 PM

I don't know all the differences between the two kind of ins. We bought what the financial advisor advised. We do have guaranteed renewable term. The premium can not exceed a set amount per year. I believe Dh's is $1395 a year and mine much less.

By the time our "cheap price" term is up we should be self insured. We are close to 40 now.

I must say 8% interest sound pretty nice!

**annymoll** · 09-20-2007, 10:15 PM

Large policy on DH, smaller on myself. Better to be safe than sorry.I rest easier knowing we protect each other this way.

**crr38095** · 09-22-2007, 11:36 AM

My husband and I have enough insurance that we're worth way more dead than alive at the moment. I can not stress <IMHO> the importance of life insurance. My first husband and my childrens biological father died when they were 1 and 3 and if not for that life insurance <and it was a very very mall fraction of what I have now> then I don't know how the kids and I would have survived. And believe me, the only reason we had that insurance is because my parents forced us to get it. We were young, dumb, and thought we were invincible and that nothingwould happen to one of US. That type of thing only happened to other people. But it doesn't only happen to other people, and it DID happen to us, and I don't thank my mom for very many things <long story, major drama, very estranged relationship> but I DO thank her for that advice. We currently have enough insurance that God forbid something happened to one of us or both of us, then our childrens gaurdian would not have to work until they turned 18 so they could totally and completely focus on just raising our children and helping them heal, and so that their college is totally paid for. Now that our kids are teens we will eventually lower it, but not yet. For me personally, after already barely surviving losing my husband once, I NEED the security of knowing that money is there for my kids. I was there once, and at a time like that, the last thing you want or are even capable of focusing on is money, or logical rational thought. I apologize for this being so long, and sad its just a subject very very close to my heart and something I feel very very strong about. You just never know what tomorrow could bring.

**Rompers1** · 09-22-2007, 12:35 PM

Are these all policies you've purchased for yourselves or thru work? The only insurance we have is thru my husbands job, but of course if he loses it, we lose the insurance.

**Telephus44** · 09-22-2007, 09:37 PM

Honestly, this is on my financial to-do list. We have currently:

1. A small $20,000 (whole or universal) policy on DS. Cost is $9/month, fixed for the life of the policy. The idea is to cover the cost of funeral expenses if necessary, and when he turns 21 he can either keep the policy or cash it out and use the money as he sees fit. This is what my parents did for me and my sister, and it helped me a lot. I chose to cash out the policy and used it as a down payment for my first car and the car insurance policy with it.
2. A small $30,000 (whole or universal) policy on myself. Cost is $273 per year. I did get this as an investment - I was just out of college (unmarried, no kids), and wanted to make sure that I had something I could always fall back on if I needed it, and would be able to cover my student loans and funeral expenses if I died.

I also have a very small amount of coverage (maybe $10,000?) through work. Since the birth of my son, we are going to get term life insurance on both myself and DH, so that if one of us dies, the other can raise our son. I'm thinking either a $250K or $300K policy, to be revisited when we purchase a house.

I think that you need to look at the differences between "whole" or "universal" life insurance policies and "term" insurance, and decide which one truly fits your situation best. Whole or Universal policies are generally more for investment, but they also aren't usually the best place to invest. You should research the policies on your own, and not listen to anyone who thinks that one type is ALWAYS better than the other.

Another general rule of thumb is that life insurance is only for people who have others that rely on their income - so the very young (children) and very old (elderly) don't need it. This makes sense, but again - you need to examine your situations and your reasons for getting life insurance.