I'm just curious how much life insurance other SAHM have? We have a 500k policy for me. I wonder if this really is enough, however, because without me, the kids would have to go school, and I'd insist it be a free-school. There are a few in Chicago, but they are expensive private schools. Since we live in an expensive area, I'd also think we'd need more money to cover all I do. I do all the yard work, housework, financial planning, étc. To have someone else do this will add up to a lot of money quickly.
A friend is dying of cancer. I want to make sure my husband is covered if something happens to me. He isn't a planner, or practical for that matter. I'd like to have a plan in place for if I die, and I want to make sure there is enough money to make it easier on hubby. He's a smart guy that doesn't do the silly details of everyday life.
So, how much life insurance is a SAHM worth? 10 x our salary is what, exactly? Dave Ramsey seems to think it's 40k a year. Over 18 years this is 720k. I think this is low. A nanny would cost 30-50k a year, yes?
Thanks everyone! We have a lot of insurance for hubby, including disability. But we are in the process of doing a new trust, and i just wanted to update our insurance to it's all up to date in our trust.
I may see how much it would cost to pick up another 500. My current policy expires when my youngest is only 15, so I think maybe picking up another 20 year might be worth it if I can get it cheap. I am 43, so it may be expensive.
And btw, we are putting in our will the type of school we'd like our children to go to. It isn't me making decisions about the kids education by myself here folks, it's hubby and I. Together we picked this path, and I have no reason to assume he wouldn't continue on it if I were to die.
J., my life insurance needs are like a 25 year old. I have super young children. Yes, we have savings, but we didn't start saving until about 13 years ago. I was in grad school, so I didn't even pay into SS. Hubby didn't move to the states until he was 30, and he lost whatever pension he had in England. We save a lot trying to catch up. We cannot retire now, we have three college funds and no where near enough in retirement since we have nothing to show from our 20s. We aren't doing too bad, but we can't retire in our current lifestyle. Our story is nothing like yours, so while it's great you can retire, not all of us picked paths like yours. Mine cost me 32k. Sure, we have savings, but it's no where near the kind of money hubby would need to replace all that I do around here. I do not have a million sitting in savings. Good for you that you and your hubby picked good careers that allowed you to be so lucky, but for many of us, having a million in savings just isn't realistic.
We are getting long&-term care next year.
We don't have any on me. My husband would probably be much better off financially without me...I'm expensive😉
I have had a million dollar term policy for the last 14-15 years (inexpensive imho), and it expires when I'm about 50.
My kids are 21 and 18, so I probably won't renew it. But I've been glad to know that it's it been there for a big chunk of their growing up years.
It can be very expensive to replace a stay-at-home parent, especially if you homeschool (me too). Even if you don't homeschool it's expensive.
Hi J.,
I am a financial planner and I do work with life insurance. I also want to say that one of my best friend's husband is dying of the same cancer as Beau Biden. So please understand that I am not trying to insult you.
If you died, things would change. Your children would go to whatever school your husband and your family thought would work best for the circumstances. You can't insist on anything...you are dead, remember?
Your husband would either do the yard work, hire it out or move. Same with housework - it wouldn't be to your standards but you aren't here now.
I only have $300K on me. I do work, as a financial planner, I handle the business side of the household and I do most of the housework with the occasional maid service thrown into the budget. My children are not infants and attend public now but will be in private for middle and high school. Life insurance will handle the house plus tuition through high school as well as in-state college tuition for children.
I would suggest that if you are uncomfortable, pick up a bit more term insurance. Maybe an additional $200K for 10 years. As your children age, you can drop life insurance.
While I do sell life insurance, I do not believe in over-insuring and many insurance agents do!
I think that's plenty. If the kids are in school they aren't messing up the house...which eliminates the need for a nanny and a housekeeper. As for financial planning, if you have your ducks in a row, it should already be on autopilot.
I'm not sure how you can insist on a school if you're deceased. Your husband will choose whichever school he thinks best.
I am not a SAHM, but I carry about 7 times my annual income. In the event that something happened, my husband would have the money to pay off the house and all the bills and could manage on his salary alone. Our kids are 7 and 9 though and are in school so we do not pay a full time daycare anymore.
Life insurance is there to replace income if something happens. I would suggest that you would only need life insurance until your youngest is 18. Beyond that, I would hope that you have separate college accounts for your children to cover their education.
I currently have a $500k policy, but I think we need to up it to $1mil. We have similar expenses to your household, and I also have student loans left, and since we plan on me being the primary caregiver to my aging in-laws, that has to be figured in too. If I recall, you might also have an aging parent moving in with you at some point, so I am assuming you would also be the main caregiver. In-home care is EXPENSIVE.
I also manage our rental properties, so he'd have to outsource those duties as well, which would be several thousand a year.
I have $1 million. I don't know if we would do less. With my husband's job, daycare won't work, so we would need a nanny. He'd also need a maid, and probably do some kind of meal order plan for at least a year until he learns to cook.
As for SAHMs not getting disability insurance, you can always look into long term care insurance. I have that as well. It kicks in 60 days after the initial diagnosis.
J.-
We recently had this conversation with our financial advisor. Apparently the measure of life insurance you need would be that amount of principle which when properly invested would make up for your contribution to the family in the event of an untimely demise.
It should cover your final care, funeral and burial costs. Your contribution to the household- laundry, cleaning, shopping, mending, child care, cooking, taxiing etc. Your contribution towards your children's education current and ongoing, and your other contributions.
Using your numbers, 50x18= $900K. Arguably the family would need some pocket of money immediately, say $100K for the first year, and $50K for each additional year, but some corpus less than $900K could be counted on to grow to $900K given the 18 years that you had in mind.
Best,
F. B.
I believe our plan has enough to carry out a decent funeral for me and hubby and daughter.
We look at things differently.. That said our child is now 20 and we don't have multiple children. We never carried that much insurance on me at any point. I don't view myself as non replaceable or my family can't survive without me.
As a "mom"... Of course I am non replaceable but I never doubt the ability of my husband and daughter step up and take over. Just because I die does not mean they don't continue to strive. I realize there would be some emotional hardship but I would fully expect my hubby and child to be able to move on.
Our belief is that you prepare ahead of time. We know we are going to die. We are covered for illnesses, disability etc very well.
Each family is different and needs are different.
What we opt for is probably different from most but I'd rather have all those premiums in my account vs paying some insurance agent I don't know a commission.
It's all about planning and what's best for your family.
All the best to you!
As much as you qualify for is the amount you should get. Insurance is to "replace" you - that means EVERYTHING you do to make it possible for your husband to take care of your family. It would cost a load of money to hire the people that do all the things you do at home. I believe that you would qualify for at least 1/2 of what your husband would qualify for on his income.
Insurance is based on income/age/health. Usually 20x income if you're younger, 15 if your a bit older, so if he's making 50k, he'd qualify for 1 million to replace him, 500K to replace you.
Hope that helps.
I think we have like 250K. Probably not enough, but I don't want to pay a fortune in premiums.
Depending on your age, the premium for $1 million should be manageable - you're paying for peace of mind too. We had that until our son was grown. By the time we cut it back, we were older and premiums would be going up anyway. So it worked out.
You are right to calculate the cost of what it would be to replace you as far as a nanny goes. Also, if you have a high mortgage that could be paid off, that should be considered as well. And even college and other future costs for your kids. Less things your husband would have to pay if something did happen to you.
What if he dies? I hope you also have considered the same if something happens to him. You would need to have enough for you to continue to be a SAHM until the kids are on their own and even more if you never want to work outside the home.
My husband and I are both insurance agents. I don't think there is a number that would be "enough". You know what your annual salary is so you x10 (for number of years) and that is the amount. Dave Ramsey is probably only using 40k as an example. If my husband makes 100k per year times TEN years would be a MILLION dollar policy. My husband has MORE than 10 years to work, so if I NEVER want to work and make sure I have "enough" then maybe I need more than a million. Get it? That is what the TWO of you need to decide because you obviously know what your actual income is and how long you will need a nanny or plan on not working.
So don't put it off and get it locked in while you are younger and in good health. Insurance rates increase by your age every SIX months. So many people wait and then something happens and they run to get insurance and they either can't afford it or are denied because now they have a health issue that isn't covered. So sad. Good luck.
i think get as much as you're comfortable paying premiums for. better too much than not enough.
wow, we only carried 50K on me until very recently. emotionally i'm a big deal, but financially not so much.
but you do have littles, and i see your point. no clue how much you should get, though.
khairete
S.
When hubby and I bought life ins. my main concern at the time was will I have enough to buy out my house and be able to live in it? So that's how much I bought. I still have that same amount as I think it was a good amount to go with. I do work so if my hubby died (he has the same amt as me) I'd have my house and be fine. Although I'd likely sell it as it would be a lot to manage on my own. And if I were to die, he'd have my policy AND a policy I have from work. So I always tell him I'm worth about 100k more than he is!
We have 4 kids. We have large amounts on both of us (over a million each). When we sat done with the place that was handling military retirements, planning, etc. we went through what Tyler would have to use or get should I die before him.
Daycare/nanny costs
Education costs
house cleaning services
all the things **I** do to keep our family going. Tyler was taken back on all that was done, things he took for granted.
Now that the kids are older? I think we should have done more, but since we are older, we'd have to get an addendum or just more policies and neither one of us want that, really.
I answered another question about this. You really need to have a plan in place.
We don't have any on me. My husband's salary would cover the cost of a nanny, cleaners, etc.
You do realize you'll be gone and hubby will have full control of the money and what happens to the kids right? You don't get to order him to take them to this school or that school. That just sounds odd and controlling.
I don't know how much you should have but if you sit down with your insurance rep I bet they'd be glad to sell you more. I also wonder, if your husband goes before you what happens to his life insurance? With what you have and he leaves you could leave a nice inheritance for your kids.
Do you have a family picked out that will take your kids and manage the life insurance to support your children in the case you both go at the same time? I was designated by the family I was a nanny for to take their kids and I would receive an independent income besides the money for their support. They never flew on the same plane and when they traveled by car they often took separate cars since they had several children. This way they kept the odds of them being in an accident or crash to a minimum.
That is what I have and I feel comfortable with that.
DId you know SAHMs cannot get disability insurance? Because 'we don't make money'. However, if something happened to us where we cannot do our 'job', it would cost a lot to cover what we do. Its so stupid!
