SAHMs - how much life insurance does DH have?

[newyearae]

I feel morbid asking about this, but it's something we need to figure out. If you are a SAHM, what kind of life insurance do you have for DH? For yourself? Thanks for any input!

[CrazyLucky]

I'm not a SAHM, but our financial advisor has told us everyone should have 10x their salary in life insurance. Theoretically, you could put that in a fund and lives off the gains and not touch the principal. I would think that if I was a SAHM though, I might want it a little higher - enough to pay off the mortgage plus the 10x so I would have to stress about having a place to live.

[Pom]

I SAH, but we are child-free. We are also older 45/46, but we carry $1 million on Mr. P and due to my health issues/family history, no coverage for me.

[gardengal]

essentially salary replacement until retirement. Which is OK for us b/c we have other investments (beyond retirement savings) that could be used for our children's education and additional income.

For me, we have, essentially, the cost of a nanny from now until our children are in college.

In short, it depends on your whole financial picture. Our house will be paid off soon-ish (less than 10yrs), we have surpassed retirement benchmarks, the age of your kids, life goals, etc.

[iheartbanjos]

I don't SAH, but 10-12x your income is recommended.

Don't forget that you need life insurance as well. You would want your H to be able to afford the world's best nanny should something happen to do.

[mbcdefg]

I'm not SAH, although I likely will be if/when we have a baby. We each have $750k, plus we each have a policy through work ... mine is 1.5x my salary and I think MH's is the same. 

[badgergrl]

Poof

[thatgirl2478]

DH has roughly 12x his TOTAL income (he has income from his job and from VA disability). 

I have about 450k on me, just a bit more than would be needed to hire household help with the kids/cleaning and possibly help pay for college/the mortgage even though I don't currently contribute to the payment of those.

[genet313]

I don't SAH but it's likely I will if we have 2 children.  We currently have $2M on DH, which is not within the recommended 10-15x salary, but we were mostly concerned with paying off the mortgage and having a decently sized college fund for DD/future children.   We will likely not change this coverage amount if/when I do SAH.  If anything did happen to DH, I would likely go back to work.

[1yeartogo]

I just started SAH this past year. We don't have nearly enough I think he has like 100k which wouldn't even come close to our mortgage and there is no way I will ever make what he does even if I go back. I've mentioned a few times that we need more, but I really need to have this convo with him again and force him to understand why we need to do this so our kids would be taken care of.

[CheeringCharm]

2 mil

[aurora]

The 10x salary rule is a pretty common rule of thumb, though there are a lot of individual circumstances that could change that a lot.

[Gato]

We have 400K on H; it's expensive as is because he has a chronic disease.

What is the rationale for having 10X your salary? I can't understand why I would need to pay off our entire mortgage or have salary replacement until retirement. With what we have now, it seems like I would get back on my feet and replace his income myself within a few years.

[jr009j]

4 mil. We have something on me (maybe 300k), but he honestly wouldn't need it if something happened to me, as he could more than afford a nanny on his income. He'd use what we do have to pay off the mortgage.

[gardengal]

Feb 2, 2016 11:35:54 GMT -5 Gato said:

We have 400K on H; it's expensive as is because he has a chronic disease.

What is the rationale for having 10X your salary? I can't understand why I would need to pay off our entire mortgage or have salary replacement until retirement. With what we have now, it seems like I would get back on my feet and replace his income myself within a few years.

This is why I advocate looking at your unique picture vs. just going off of rules of thumb.

Personally, it would be incredibly hard for me to replace my husband's salary. I work part-time now in a low-paying field (I did a career change). It would be incredibly difficult for me to do my job full-time w/out significant childcare support (lots of evening & weekend hours). I don't have local family & babysitters in this HCOL are expensive.

Going back to my higher paying & more 9-5 career would be extremely difficult given it's been 5yrs & the career was based on specialized skills I don't even remember how to do anymore. Even then, my husband was making 2x my salary. The reality is that, if my husband were to die this moment, I wouldn't pick up full-time employment until my youngest was in middle school (which is like 10yrs away). And, even then, it wouldn't be near my husband's salary.

[hamster]

How much are people paying monthly? I mean, I know the ROI is good if something happens, but it just seems really expensive to me....

[Deleted]

Not enough? We have $500k privately and $350k through work which is well below the suggested amounts but is fine. I am a SAHM to four kids and this amount would last us a good while. I am 34 and employable so I would be able to go back to work without too much trouble should DH pass away.
I will likely increase the amount through work during open enrollment this fall. If I increase to $500k it will not be much of a cost increase.

[WOUNDTIGHT]

Feb 2, 2016 12:11:58 GMT -5 hamster said:

How much are people paying monthly? I mean, I know the ROI is good if something happens, but it just seems really expensive to me....

It can be expensive, but it's so. damn. important.

Think of it this way: everyone insures their house, because it's their largest asset, right? So psychologically, you don't feel like the premiums are being "wasted."

However- and especially for a one-income house- the largest asset isn't your home. 

It's the human life value of the insured. This includes:

- Current earnings

- Future potential earnings

- Projected future retirement fund contributions and employer matching funds

- Cost of health insurance (assuming it's through the primary breadwinner's employer) 

It also includes smaller but everyday important things like contributions to home maintenance, whether that be having to hire someone to mow the lawn, clean the house, handyman work, do pick up and drop off of kids (if the surviving spouse goes back to work) and so on and so on and so on.

There are posters here who have lost a spouse at a young age and the life insurance, I'm sure they would tell you, was a tremendous benefit, but tangibly and intangibly (peace of mind, not having the stress of having to sell assets to stay afloat, the ability to take your time finding a job and not having to take the first one that comes along).

Insurance is my industry so I feel passionate about it.

ALSO- you are way, way more likely to be disabled at a young age than you are to die young. So I would prioritize disability insurance before life insurance.

[thejen626]

We have 5x DH's current salary. When we bought the policy, it was more like 7x his salary, we haven't raised the amount in a few years, although we probably should. We have a small rider policy for me, it's around $80k if I remember correctly.

We pay $110 a month for both policies.

[callie]

Not enough thanks to my MIL saying to DH "your father is worth more dead than alive" about 20 kazillion times.

We have 750K which we figured would cover a small house(I'd move from our current area), college money for DD, money to continue my education, and then a small cushion for savings.

[gt7301b]

Feb 2, 2016 12:11:58 GMT -5 hamster said:

How much are people paying monthly? I mean, I know the ROI is good if something happens, but it just seems really expensive to me....

I don't stay at home, but we have $1m on both of us for 20 year level term policies. My policy is about $30 a month and DH's is $42 a month.  We went with 20 year instead of 30 because there was a pretty big difference in premium between the two.

Honestly, we would be fine with less coverage, but it is all about piece of mind for me.  If DH were to pass away I would want to have more choices available to me.  That might mean moving and taking a lesser paying job or just hiring help.   We don't need to have salary replacement till retirement, but the money sure would make life easier, especially after dealing with the death of a spouse. 

[Gato]

Hmm, maybe I'm overly optimistic, but it seems like 2 years of training would put me right back into the running for the kind of jobs I used to have. I am older, so it would be a little difficult to overcome age bias. At the same time, my city is growing exponentially and my mortgage is quite affordable. I think even being an assistant I could make ends meet.

[msmerymac]

Feb 2, 2016 12:11:58 GMT -5 hamster said:

How much are people paying monthly? I mean, I know the ROI is good if something happens, but it just seems really expensive to me....

A lot. We pay $155 for my husband, $1 million, half on a 20 year policy and half on a 30 year policy. We got insurance when he was 40, so there's that. But I did the math, and investing that amount would not net us $1 million in 30 years. So if I end up having to use it, I'm in the black. If not, well, I'll thank my lucky stars to not be a young widow.  

[gt7301b]

Feb 2, 2016 14:38:59 GMT -5 Gato said:

Hmm, maybe I'm overly optimistic, but it seems like 2 years of training would put me right back into the running for the kind of jobs I used to have. I am older, so it would be a little difficult to overcome age bias. At the same time, my city is growing exponentially and my mortgage is quite affordable. I think even being an assistant I could make ends meet.

But would this be the path you want to take? Even though I am currently employed I wanted enough life insurance on both of us that we would have options if the other one passed away. The cost difference between $750K and $1M wasn't that much and it sure gives me peace of mind if something were to happen.

[Gato]

Feb 2, 2016 15:14:54 GMT -5 gt7301b said:

Feb 2, 2016 14:38:59 GMT -5 Gato said:

Hmm, maybe I'm overly optimistic, but it seems like 2 years of training would put me right back into the running for the kind of jobs I used to have. I am older, so it would be a little difficult to overcome age bias. At the same time, my city is growing exponentially and my mortgage is quite affordable. I think even being an assistant I could make ends meet.

But would this be the path you want to take? Even though I am currently employed I wanted enough life insurance on both of us that we would have options if the other one passed away. The cost difference between $750K and $1M wasn't that much and it sure gives me peace of mind if something were to happen.

I guess I have piece of mind with our current $400K.  That's like 5 years to retrain and get back on my feet, in my situation. 

My dad actually is an insurance agent so I should ask him, lol.  He will probably shake his head at me.

[mainelyfoolish]

We got our policies when we were both 31, shortly before we started TTC (we're the same age). I have a 20 year term policy for $300k and DH has a 30 year term policy for $1 mil. We pay about $150 per month for both, $25 for mine and $125 for his. DH also has a 2x income policy through work. My policy is intended to provide money for childcare and household help (or a whole lot of take-out food...haha). It will expire when our youngest child is 14. DH's policy should be enough to sustain us while I get back to work (probably will need to re-train/change careers from the work I used to do) and supplement my income because it is unlikely that I will be able to earn as much as he does. That policy will expire when our youngest child is 24.

[WOUNDTIGHT]

Feb 2, 2016 15:59:19 GMT -5 incogneato said:

I think we started with 1mil and raised it but I can't remember how high.

I will urge EVERYONE to get life insurance ASAP. I'm so incredibly thankful that we did it when we were both young and healthy. Since then my previously healthy as a horse husband has had two types of cancer. He would be uninsurable if we had waited. Do it.

Is everyone listening to Incogneato?

I'm so sorry about your H's health problems but damn if this isn't more common than people realize.

[Marmee]

We have 1M on DH plus whatever extra through work. I'm a SAHM but we have passive income that would remain (or I could cash out and get an extra $500k+). Plus I have my profession (same as DHs) to fall back on. I think we have $500k on me. We've had LI since I first had a baby so we were in our late 20s when we got it originally. He has long term disability too and I believe that was significantly more expensive.

[samanthamkm]

We have 650k on DH and 125k on me. We have never relied on my income for anything. We are going to up my life insurance since it won't cover our mortgage anymore.

[Cicero]

$2 million on H and $250k for me. We pay the same for each monthly and it's around $100. Listen to incogneato people. This is the difference between having a super preferred rate and waiting to get insurance until after you have developed a neurological condition that renders you insurable but at the highest possible rate. He is several years older than me and my term is ten years shorter than his.