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 Post subject: Re: Life insurance on a stay at home mom
PostPosted: Mon Jul 23, 2012 4:42 pm 

Joined: Fri Apr 27, 2012 1:08 am
Posts: 35
Bichon Frise wrote:
just throwing this out there. If I had a family of 4 who made $73k and only spent $18k (and claims to pay virtually no taxes), I'd slice out a couple hundred bucks a year to make sure my family was taken care of. and then I'd slice out even more money to make sure I had adequate disability coverage. but, that is just me.

The comfort the private insurance policy would bring is well worth the 0.7% of my pay (if you are healthy, obtaining LI through a group policy at an employer is a bad idea, BTW). SS is a sticky and complex web (that is ever changing to boot). And I would want to make sure my childrens were well taken care of and would at least have the option of college without drowning them in debt. Again, just me.

To loosely summarize the start of the chapter from the Boglehead's book on SS, "depending on government programs is no way to live."

Our family's income fluctuates, but we try to keep spending at similar levels (may splurge a bit on travel though). And the taxes...again that varies, but a good bit of income may not be taxable (due to wife working away from home). And yes, disability coverage is something else to look into. Death is not the only way your family may lose an income...in fact if one is disabled, you may need more insurance (because if you die...well there's no cost in supporting you, but if you're disabled, there may be an even higher cost in supporting you).

I don't necessarily think it's bad to rely on government programs that are available to you. On the other hand, I realize that SS is almost definitely going to change by the time we qualify for it. So when I figure SS into our retirement plans, I figure on between 50%-75% of it being available (ok ok, I rely on the 50% figure, but also realize it'll probably be closer to 75% so I look at that figure for the heck of it).

Anyways, it's kinda like asking if you should get full-coverage insurance for your car. It doesn't cost a lot, it'll give you peace of mind, etc. etc. Or you can just get yourself in a position where if the car's totaled, you can buy another one out of pocket. Now the only reason you (or at least, I) would get full-coverage insurance would be for financial reasons. If the odds are that you would come out ahead financially by not getting full-coverage insurance, then you'd likely drop it. I feel the same way about life insurance. We'd be fine if one of us passed away without life insurance, so I look at it in pure numbers. Odds are, we'll live for quite a while, and all the money for term insurance would be for naught. So, running the numbers and percentages and all that, the best option FOR US would be to not have life insurance. Now, if someone offered us a ten million policy for $1 a year...well, the odds of one of us dying are pretty small...but with odds like that, it'd be a smart financial move to take that deal.

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 Post subject: Re: Life insurance on a stay at home mom
PostPosted: Fri Aug 10, 2012 4:29 am 

Joined: Wed Apr 11, 2012 6:26 am
Posts: 4
Your concern is very legitimate and very real. Many spouses don't realize the value a stay-at-home spouse brings in even if they are not working for money. With young children and numerous chores surrounding them, the emotional disaster that can ensue once the spouse primarily responsible for their well being dies won't be a pretty sight. You should have at least some form of life insurance protection on her, even if its a simple and affordable term life policy, which is the [SPAM LINK REMOVED] solution around.

Pat Cassidy
Disclaimer: I work for [an insurance company] and this is my personal opinion.

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