Should a SAHM have life insurance?

10 years ago

I guess I should say a SAHW, as my kids are grown and gone. We were advised several years ago to drop life insurance on me because the purpose of it was to replace the "work" I provide to the family, and since the kids are grown, my "work" is done. We have no debt so there would be no financial struggle there. I have a couple of small policies that will cover burial and final expenses.

But I've been wondering about that logic lately. What if I were in an accident or have a serious illness and incurred a huge hospital bill? Of course, that could happen and I live through it and still have to pay that bill.

So what are your opinions. Life insurance for almost retirement aged SAHW? How much or what percentage of income is recommended?

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Comments (17)

3katz4me
10 years ago
Don't you have health insurance to cover medical bills? If you don't you probably have a bigger problem to be concerned about than life insurance.

Do you have some kind of income that would cease upon your death that you'd need to replace for your spouse?

Do you provide services that your spouse would have to pay someone to do if you died? Could he afford to do that without life insurance?

Similar to the health insurance issue, do you have a plan to cover long term care expenses should you have that need? Again that could become a bigger concern than life insurance.

I think it's common advice to drop life insurance at some point when you no longer are providing for a family and no longer need to replace income from working years.
blfenton
10 years ago
I am 60, was/am a SAHM and still have life insurance. We have lowered the amount now but it is still in place. if I die before my DH It will provide housecleaning services, any extra care that I may have normally provided to my DH as he ages but which now he may have to pay for, and there is some set aside in the policy that will be given to my two sons. If my DH dies before me I will cancel my policy.

I think the reasons for life insurance at this stage are not only financial but also very emotionally personal. Because i never worked I always felt that I didn't contribute enough to the home and family (I know, I know,,,,) BUT that is how I feel. And so that is why I have the policy and that some of it is to be given to my sons. My DH has some as well and if he dies before me my sons and I will be ok regardless.
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joaniepoanie
10 years ago
"Do you provide services that your spouse would have to pay someone to do if you died? Could he afford to do that without life insurance?"........ahem....lol
DLM2000-GW
10 years ago
I JUST had this discussion with my agent, asking if I should get a new policy - your story is basically my story. My agent asked me what I wanted the policy for. So I told him my thinking is if I pre-decease DH, I want something for our sons that comes to them directly, no waiting for both parents to die (sorry to be so blunt but that's my nature). My mom died 12 years before my dad, and each of us received a nice, (not huge life changing) inheritance from her policy. She had the policy for just that reason - to give us something significant just from her. All the saving and investing she and my dad did was largely from HIS business - she worked part time but was not a major financial force in the family. This was her way of saying **I** am giving this to my children as opposed to **WE** are giving this. I know she never really thought it would play out the way it did, she was always health conscious, my dad smoked till the day he died...... but that's the gamble of insurance. I am sorting through my policy options now and will be re-insuring myself.

BTW - there may be a small benefit for DH but that's not my goal. I know he will downsize and streamline his life significantly. My goal is to have my sons be sad, cry and miss me a bit then get the inheritance, perk up and say 'thanks, mom!!'
TxMarti
Original Author
10 years ago
LOL from me too joanie.

Have health insurance, long term care, and disability covered. As far as other things I do that dh would have to pay for, no, probably not. Not anything we don't already pay for anyway.

dlm, what did your agent say?

This post was edited by marti8a on Wed, Nov 6, 13 at 16:02
tinam61
10 years ago
I think if you have health, long term care, burial expenses, etc. covered, you probably don't need life insurance. Unless you feel like DLM. And I'm not knocking that. But unless you want to leave insurance $$$ to someone, then I'd say no.

tina
blfenton
10 years ago
dlm2000- thanks for posting. When I mentioned to our agent and my DH what I wanted to do they looked at me a little strange but did go along with it. And your thinking is the same as mine. It's nice to know I'm not alone in that.
joaniepoanie
10 years ago
I could be wrong on this, but I think I recently read/heard that it is no longer recommended to purchase long term care insurance and a lot of these companies are getting out of the business and won't be around to honor claims.
DLM2000-GW
10 years ago
marti8a - After I gave my explanation to my agent he said he asked because it's important for people to clarify their reasoning. My reasoning is clear and with purpose as opposed to someone thinking they *should* have it 'just because' without a clear idea about purpose. He gave me a few examples of other clients. One was about a man who has a valuable business, 2 adult children, one who has always worked in the business and will inherit it in total, the other never involved in the business working as a teacher. His policy is to equalize the inheritance difference after division of non business assets.

At the end of the day, it's a very personal decision and if it's important to you for whatever reason (and premiums are within your ability to pay) then that's all that really matters. Just make sure the payout is directed as you want.

blfenton - my DH's first reaction was like your DH's. Then I reminded him that when my mom died, we had a 3 & 7yr old, he had started a big addition/remodeling to our house that he worked at on weekends and after his regular work day doing the same work for his customers! He was burning the candle at both ends and at huge risk of injury from that alone. The money from her allowed him to take off 3 months of work to concentrate on our home and allowed us some upgrades along the way. That gift from her was HUGE in our lives. And that's how I see it, as a gift. She didn't get to see our lives unfold or her youngest grandkids grow up but she planned to have a positive impact just in case. I should add, she also invested in college bonds for both our boys and they know how adding that into our savings and their work allowed them to graduate debt free - HUGE gift.
maddielee
10 years ago
My mother was a SAHM for her whole life.

When my parents passed, I never once even thought that it would be nice if my mother had left me money. Especially seperate from what was in their estate.

Actually, my siblings and I were sorry that my parents didn't spend every penny they had.

I guess the thought of leaving money from a policy is nice, I don't think paying for life insurance is the best way to add to your estate.

ML
baylorbear
10 years ago
I am a SAHM, and I have a life insurance policy. DH does too, we got them when we had DS1 (I was working at the time). DH has been telling me that we don't need mine anymore. I was diagnosed with cancer in 2012 though, so if I canceled mine, and needed life insurance later, I probably wouldn't be able to qualify ever again.

Our children are young, and if something happened to me, DH would have to start paying for childcare. My policy would cover that and then some.
maire_cate
10 years ago
Now that all 3 kids are grown and out of the house we're in the process of cashing in my life insurance which has accrued a significant sum. We'll take the money and use it to prepay DH's policy which has a much larger death benefit than mine.

He'll be retiring within the year and this way we won't have any monthly premiums to pay. Odds are I will outlive him. If I die first he doesn't need the money from my policy for anything. And we've already made separate arrangements for gifting to the kids.

DH and I discussed this with our attorney, financial planner, life insurance agent and accountant and all are in agreement.

You'll have to assess your situation and decide what works best for you.

This post was edited by maire_cate on Wed, Nov 6, 13 at 21:36
terezosa / terriks
10 years ago
baylorbear, since you have young children it's important for you to have life insurance, so that your husband would be able to pay for childcare, housekeeping, etc.
baylorbear
10 years ago
I agree, Terriks! I was in my 20's and in great health when we bought our policies, so I have a very low premium. I don't have any intention of canceling it! Hopefully it won't be needed anytime soon, but if it is, it will be there to help my family.
ratherbesewing
10 years ago
Baylorbear: If you have a "term" life insurance policy, it has an annual premium that remains the same for the term (usually 10 or 15 years). After that, you will be required to go thru the application process again. As you can imagine, the price increases with age and health. Check your term! My DH's carrier did not tell us (totally our fault) our term was over and I received a bill that was 3x the regular premium! We had to scramble to find a new policy.
TxMarti
Original Author
10 years ago
Yes, the rates get higher as we get older. That's why I thought I'd check before I hit 60. We just got a 20 year term on dh a year or two ago because the rates for men are even higher after 60. I heard one time that there is an age that is best rates for life insurance but I can't remember now. Seems like it was between 8-12 or something like that.
ILoveRed
10 years ago
Baylorbear--hope all is well now.

We have a large policy on dh as recommended by our financial advisor..so we don't have to have a "fire sale" if he dies. His words not mine. We are in business.

The same person advised a much smaller policy on me. I am not involved in the business but I would be hard to replace :-)

Should a SAHM have life insurance?

Comments (17)

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Should a SAHM have life insurance?

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