Do You Have Life Insurance? How Much Is Enough?

Updated on April 23, 2012
M.. asks from Anchorage, AK
18 answers

Hi Moms, I have been thinking a lot lately about life insurance. In February I had surgery and after the surgery I developed Sepsis. I was very very sick. There was about a week there where they did not know if I would make it. But thank the good Lord I pulled through. I have one more procedure next week, and then I should be back to full complete health. On top of that, last night my friend's husband died from an auto accident. They had no life insurance. These two things have really got me to thinking about life insurance. My husband has a policy & I am the beneficiary. We have no life insurance on me. My husband is the primary bread winner. I work too but he makes loads more than I do. Should we have a policy on me too? Had I died from the Sepsis, he would have got nothing. Do you have a policy on yourself or just your husband? How much should our policies be? Enough to pay the house off? More than that? We are going to get a policy on me & I am thinking I want my husband to increase his policy. I was hoping maybe you mama's could give me some guidance. How much is enough? Thanks in advance!

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answers from Phoenix on

My husband and I are both insurance agents so we have a huge amount of insurance simply because we know the benefit of having it and also know of horror stories of what happens when you don't. So my advice is to find an insurance agent to speak with. Yes, my opinion is you, hubby and your KIDS should all be insured. Personally, if something were to happen to one of my kids, I could not just take the company offered 3 day funeral leave and then go back to work. I'm sure I would be a hot mess for months, if not years, and financially would need something to get us thru that. Most people don't think about that. Anyway, talk to someone local who is an expert in their field and they can help. Good luck.

4 moms found this helpful


answers from Dallas on

When it comes to life insurance you need to consider what you will have to support in the future? For instance when we got life insurance they asked us if they thought parents should be responsible for paying for college. Estimate your costs on that and add it to the total. Make sense?

My husband and I would like enough money to pay off our debts (long tem and short term) and provide for our kids through a 4 year university. We do that individually in case one of us dies the other one will be taken care of and not have to worry about combined debt.

3 moms found this helpful


answers from Boston on

My father always said you cannot insure yourself against everything and you cannot afford to replace everything you would like. It would be great to have a 5 million dollar policy so the survivor could live in comfort, but the monthly cost would be way too high for most. We do each have a 20 year term life insurance policy that is sufficient to allow the surviving spouse to keep the house and handle about a year without income to survive the loss and get back on our feet. We got these policies when the kids were born, so they will last until the oldest is 20.
PS: more importantly perhaps is to have a will and determine a guardian for your kids and ask that person (or multiple people incase they pre-decease you) if they are willing to take on kids. We also stipulated in our will that if we both pass away that the guardian controls the money until the kids are age 25 - the lawyer advised this since 18 year olds might just have a huge party and be left with not enough to live. Also important are a living will (who determines your health care when you no longer are able, for instance do your wish to be kept alive in a coma) and a health care proxy (who gets to tell the doctors what you want when you cannot - in most states I believe the default is a spouse, but there are famous cases in the news where parents and spouse disagree)
From Dave Ramsey:
How much life insurance should someone have?
As a general rule of thumb, you should have 8–10 times your income in guaranteed renewable term life insurance. Life insurance is designed to replace you, financially speaking, if something happens to you. Let's say that you earn $50,000/year, and you have $500,000 in term life. If you pass away, your spouse should take the money and invest it in a solid mutual fund. If your spouse simply pulled 10% interest out each year, he or she would receive $50,000, without ever touching the principle. Your income would be replaced.

3 moms found this helpful


answers from Dallas on

You've already gotten some good advice . . . and YES, you both need to have insurance, but make sure it is TERM life and not WHOLE life or any type of whole life policy. The recommendation is 10 times your annual income. If you go with term, it is actually affordable, and no matter what they try to sell you the "investment" in whole life is terrible. You don't get the investment when you die, only if you close out the account. Don't let them convince you that you are only "renting" instead of "buying". I went round and round with an agent at one time - that is how they are trained b/c there is more money in it for them and the company, but they are wrong about the product!!!

I work only very part-time and hardly bring anything home at all, but someone would still need to be there for the kids, cook, clean, and do all the things I do so I have a decent policy - it's about half of what my husband has and it costs me about $30 per month. My husband pays more for his b/c he is older.

3 moms found this helpful


answers from Champaign on

You should definitely get life insurance. If you were to die there would be funeral expenses, and your husband might really want/need to take time off work for awhile to be with the kids. It's really something you want to do soon.

My husband and I both have life insurance through work, but I would look into term life insurance. You probably want to get enough for 6 months to a year of living expenses (so your husband could take time off) and for funeral expenses.

It's so hard to talk about these things, so bravo to you for looking into this!

3 moms found this helpful


answers from Seattle on

Bare minimum:

- Funeral expenses (plan on 10k, but it may be more)
- Pay off debts
- 1 year's living expenses (so your partner can cry for a year before returning to work)

That number will change for everyone:


- All of the above +
- mortgage
- taxes
- tuition for each of your children
- counseling

This number is rarely less than 500,000

Which is only 50k per year for 10 years. It looks like a lot, but it's really not.

For myself... as a homeschooling, stay at home mom, I am/was saving my husband over 5,000 per month in childcare (he works 120 hours a week on average), and 20k per year in tuition. That's over 80k per year right there that he would need to pony up to maintain the life I was providing by me' presence.

Standard math = 800,000 + 4 year's tuition for our son (at 40k per year projected in 10 years time) = 960,000 + mortgage = 1.36 million.

I only ever had a couple hundred thousand on me, but in order to "replace me" for 10 years? My "cost" = 1.36 million.

2 moms found this helpful


answers from Austin on

Years ago I purchased life insurance. My agent helped me come up with a figure based on different things. Debt at the time was our mortgage, and nothing else. Then we discussed college for our child, and money to help my husband hire care for our daughter till she was old enough to drive.

We came up with $100,000.

We ended up paying off our home a few years later by doubling our payments.

So I felt good about the amount for college for our daughter. Now she will graduate, but I feel good that if something were to happen, my husband could still live comfortably and be able to help our daughter.

A good agent should be able to advise you. They asked great questions. It really does give me piece of mind knowing I have this life insurance.

2 moms found this helpful


answers from Phoenix on

We have a growing purchase on him and a term on me . The term will expire every so many years and will be evaluated based on age at that time. Some people think the Whole Life or Purchase is a waist and it prob is.......but we just have more on him then me. I think it should be looked at as a renting ins for a death and not an investment. But there is a lot of things out there to talk you into the whole life for an investment.
100,000 cash and all debts paid is a good can always add more later.

2 moms found this helpful


answers from Pittsburgh on

The general rule of thumb is to get term insurance (for your earning years) that is 10-20x your yearly salary. The idea is that this amount, properly invested should provide dividends equal to the salary that is lost. This would be true no matter your income.

2 moms found this helpful


answers from Bellingham on

My husband and I both have life insurance. Ours is both the same amount. I think it's around $560,000 each. This will be enough to pay off the mortgage, pay for schooling or childcare, and make some investments. I like the security of having it.

2 moms found this helpful


answers from Chicago on

We have $1 million for my husband, $500k for me.

Husband is a doctor, so that really doesn't replace that many years of his income--just enough to pay off our house, med school & college loans, loans on any cars, and provide enough for about 1 yr of living expenses.

I am a SAHM right now, but do earn a small income from my husband's independent contracting company.

2 moms found this helpful


answers from Jacksonville on

Yes, you absolutely need life insurance. Even if you don't work AT ALL. You have a child, and if something happened to you, someone would have to care for your child. Your husband will have to still go to work to pay the bills... who would take care of your kid? Estimate what it might cost your family to hire a full time nanny. Figure out how many years you would need a nanny for, and any associated expenses.

To that, add funeral expenses and possibly a bit to cover remaining medical bills, and whatever else you want hubby not to have to worry about. (balance on the house, college for your child, etc).

When you total it up, THAT is the number I would start from. If you have more children, then you'll need to reassess the numbers again based on the situation at that time. (how many years for your older child, care for the younger one also, etc).

2 moms found this helpful


answers from Phoenix on

Weird insurance policy. Older means pay more. And someone told me that being once pregnant and being women pay more.
I feel so sorry for you. I hope the health system here improves. I think the insurance in my country only check the heart or medical pre condition, not age and so on. The older the people, they should rest and not thinking of paying insurance.

1 mom found this helpful


answers from Toledo on

We had many discussions about life insurance. We have two big factors in our relatively large policy: 1. We're just about done building a house and have a significant loan, 2. We have four kids 8 and under, and I stay at home (well, I work part time but I am not the breadwinner either). We have enough policy on me to cover childcare expenses until all the kids are in school. We have enough on my husband to cover the new house and all other debts (requirement by the bank for getting the loan). We don't have many other debts (no credit card bills) so it was pretty easy to calculate how much of a policy we needed. It costs a bundle but the bank made us cover EVERYTHING.

I hope everything goes well for you and your last procedure!

1 mom found this helpful


answers from Dallas on

I have 750k, husband has 1million. I worked in the industry for a while and you will never be given more than "enough". The maximum insurance amount is a multiple of your income, factoring in age and health. You can purchase as much as you are "worth". The goal is to REPLACE you financially should you die, if the insurance proceeds were invested conservatively to generate income. So say you make 50k a year, get 1 million of life insurance, and you pass away - that 1 million is invested and maybe gets 5% return = 50k. I believe that SAHM's can qualify for 1/2 of the income earning spouse's amount of insurance, as the work of a SAHM COSTS MONEY if you have to pay someone else to do everything. Hope that helps!

1 mom found this helpful


answers from New York on

You should have life insurance on yourself.

I haven't read the other answers, but I'm guessing you'll get a lot that tell you $500,000 to $1 million. I disagree.

When we purchased life insurance, I took a different approach. I asked if something would happen to either one of us, how much would the surviving spouse need.

First, we would need enough to cover funeral expenses. Then we knew the other spouse would make enough for living expenses if they didn't have a car payment or a mortgage payment. I knew my in-laws would help with child care and the surviving spouse would have to pay for summer camp. So I added up, funeral costs, amount to pay off all debt (mortgage, car, credit card debt, plus some extra for a future car, property taxes, and summer camp for the next few years. Much less than the $500,000 I was told I needed. Of course, if you can afford the premiums, it never hurts to have more and be prepared.

1 mom found this helpful


answers from Chicago on

We got me a life insurance policy after our second child was born. I'm a SAHM. It is for 500k. I figure that this is what hubby would need to pay someone to do everything I do, plus afford college college.

Hubby has two policies. Accident death is actual more important than life, because the accident death has a "can't work anymore' clause, and your chances of needing this are greater.

1 mom found this helpful


answers from Lafayette on

Dave Ramsey says your surviving spouse needs enough to live off of to replace what you do. 10 times your salary is the general advice. He'd invest this and then live off of the interest every year. This is the amount your husband would have to have to hire someone to do what you do -- to take care of your children, buy groceries, do laundry, cook, clean, etc. Make sense? Really think about what your husband would have to have someone else do if you weren't in the picture. Multiply that by 10 & get that much in term life insurance. Again, the point is to invest the life insurance (if you pass away) and purchase these things from the interest earned each year.

And on a side note, whole life insurance policies are a bad investment.

I hope this helps! You do need life insurance -- please look into it!

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