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Life Insurance

September 5th, 2008 at 03:27 pm

I just paid my life insurance premiums. I paid $85 for $200k coverage. I usually get back lots of money at the end of the year. (Dividends on the policy). I can't say how much since I get some back on my disability as well - they are both through my professional association.

Anyway, dh and I both have $500k coverage we locked in our 20s which is in the same price range, (since we were so young - so we got quite a discount) but I just bought the extra $200k recently for peace of mind. I figured dh would need more money than I, if something happened to one of us, to maybe update his schooling and get more solid footing. & I figured $200k would do.

The $500k from him? I mostly consider it lost savings/retirement since he has many working years left, even if he doesn't work now. Of course early on I thought more of childcare, but truth be told I could pay all the bills quite easily if something were to happen to him. It buys me freedom to work less and still have a hefty retirement fund. (The last thing I would do is pay off my mortgage if something happened to my spouse - just makes little sense to me - though I could see down sizing and attempting to pay cash for a smaller home). But yeah, tying up all that liquidity would not be my first choice if something were to happen. Particularly I guess since I know I could pay all the bills, regardless if I had a spouse.

For that reason, I felt we were really pushed into more insurance than we needed, largely in the name of paying off our mortgage. But with time and inflation, I appreciate it. We need it less with time, but there is also more inflation with time. So it kind of evens out. I also think when we bought the $500k insurance policies we were a lot more idealistic - thinking of the bare bone necessities for survival, and less about the long-term. So I am happy with where we are at. I understand policies have gone down in price, but a new policy for us in our 30s would generally cost more than our old policy purchased in our 20s at the PEAK of health. I was actually pregnant when we got that insurance and I Was wary. I was convinced they were going to stick me with higher premiums. Your body gets all out of whack with pregnancy. & anyway, I was wary but our agent said just do the medical tests and see how it pans out - should be fine. We got the highest health rating (meaning, cheapest policy) and he actually told us few do. So the trick is, if you need it, or think you will need it, lock in that insurance in your 20s. !!!

I had some minimal insurance through my professional association, when I had BM, but yeah we waited until we were 27 or so and pregnant with LM to get really adequate insurance.

Anyway, I share all this because AAA sent me their offer for their GREAT life insurance rates. I thought it was interesting since it just happened to be time for me to renew my $200k. So I looked at it. $200/year for $200k insurance?

Eh, I think I will pass. Sounds like a terrible deal. Wink

$85 sounds much better, and it may end up being $50 in the end, once I get refund checks. They disburse the excess monies back to us, every year, after they do their actuarial magic.

Small price to pay for extra peace of mind.

2 Responses to “Life Insurance”

  1. merch Says:
    1220625636

    That's a pretty good deal. I pay $920 for $1.5 million. That should pay for the house, college for my kids, and allow my wife to stay at home for awhile.

    Like you, I don't have life insurance on my wife. I might get a small policy of $300k, but probably not much more. The main expense would be childcare, and I could currently bank roll that.

    There is something to be said about reaching a point in life when you can self insure. I'm not there yet,, but I can see it in the not so distant future.

  2. monkeymama Says:
    1220625853

    No - I have $500k on him. He has $700k on me - to be clear.

    Maybe I wasn't clear - that $500k buys me the ability to work less while the kids are young and still have a chunk of savings/retirement I expect from his future paychecks. But no, I wouldn't buy health insurance on him just for childcare expenses, or to pay off the mortgage, since I could pay those bills easily enough.

    My dh LOVES a big house and I don't. I remember telling the agent I would personally downsize and pay cash if something happened to him. He told me, "No one does that." LOL. I am afraid I am not like everyone else. Wink

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