On Wednesday I posted an entry about whether or not to take out a life insurance policy on my husband. Sadly, I didn’t get any comments. If you have any advice on the matter please let me know.
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Yes, you should get a life insurance policy. Your financial obligations sound too great to take the risk of not having a policy. I would consult a few basic personal finance books for more details on life insurance. You should also make sure that you have your estate in order so that these assets pass freely to you or your husband upon death.
I read a piece of advice from Suze Ormand about figuring out how much life insurance you need. She suggests taking out a policy worth your husband’s income times 10. That way, she says that you can invest the insurance money and earn a standard 10% interest each year… which means that your yearly interest is equal to your husband’s annual salary. According to her plan, you withdraw the interest only every year, which compensates exactly for the lost income in your home.
I feel it makes more sense to take out a life insurance on hubby when you guys have children. Just my thoughts
At the very least, I think you should get adequate coverage to pay off your mortgages in full.
The fact that you can’t get health insurance means that, as you know, you could end up paying a LOT of money for health emergencies. If you have the second house completely paid off, then you could sell it and cover even exorbitant medical costs, and could continue to live in the first without worry.
He absolutely needs insurance, because if something were to happen to him you’d have to find a way to keep paying both mortgages or sell at least one house while you were bereaved.
The only time a member of a young childless couple doesn’t need insurance is when his/her income is low enough that it won’t cause a financial hardship for the surviving spouse.
Yes, I think you should buy a term life insurance policy for him to cover the mortgages. A $500,000 15-year policy for a 30-year old male is only about $200 a year if he’s healthy and never smoked. You are not trying to get rich on his unexpected death — just to cover the expenses.
My thanks to all those who left comments. You overwhelming agreed that I should take out a life insurance policy on my husband. According to quickquote.com I can take out a 15 year term policy for $265 and a 20 year term policy for $350. At that low rate I think it would be foolish not to proceed with life insurance.