Author Topic: life insurance  (Read 512 times)

FireAnt

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life insurance
« on: October 20, 2019, 07:40:24 PM »
I've been reading in several FI related Facebook groups about getting term life insurance, and of course avoiding whole life insurance. I guess I'm skeptical that we need term life insurance. DH and I make similar incomes, no kids and no plan for kids, only debt is mortgage (and my soon to be forgiven student loans which would discharge anyway if I died). Am I thinking correctly or is there a reason I should be looking into it before we turn 35? We do have life insurance attached to our employers, but that will go away once we FIRE in hopefully 10 years.
« Last Edit: October 20, 2019, 08:21:52 PM by FireAnt »

honeybbq

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Re: life insurance
« Reply #1 on: October 21, 2019, 01:04:52 PM »
Could you each afford the mortgage (cars, etc) on your own if one of you passes? That would be the big one for me.

iris lily

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Re: life insurance
« Reply #2 on: October 21, 2019, 01:14:20 PM »
We have never had life insurance. We have no children. Both of us could always support ourselves.

ontheway2

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Re: life insurance
« Reply #3 on: October 21, 2019, 01:23:48 PM »
I think the suggestion to get term life insurance is just if you were to get life insurance in the first place. Plenty of people do not have a need for LI, and you might very well be one of them. I would not get it without dependents.

FireAnt

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Re: life insurance
« Reply #4 on: October 22, 2019, 10:52:39 AM »
Could you each afford the mortgage (cars, etc) on your own if one of you passes? That would be the big one for me.

Yes, I believe so. This is based on us having around a 60% savings rate so essentially we're living off one income already.

pdxvandal

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Re: life insurance
« Reply #5 on: October 22, 2019, 11:00:01 AM »
Once my NW hit about 700k a few years ago, I dropped term life insurance. I get a basic plan through my employer which would pay out a year's salary. Plus, we live in a 2,300 square foot semi-clown house. If one of us were to pass prematurely, the survivor would downsize. And there's the survivor benefits from Social Security to factor in.

BeanCounter

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Re: life insurance
« Reply #6 on: October 22, 2019, 11:00:27 AM »
We have two kids and have never had life insurance beyond what we had at work. We had done the math and either one of us could work to pay the bills (including childcare) if the other passed. And our work policies would pay off the house.
Now we are FI and have no reason to have any life insurance. If god forbid my spouse dies, nothing changes for me financially.

All you need to figure out is if your spouse were to die then would you be able to survive without their income. Once you have kids, then you do the math again- if your spouse were to die then would you be able to survive- including childcare and education expenses.

Honestly I think disability insurance is often more necessary and more overlooked. In the case of a spouse becoming disabled, you are left with less income but with the same amount of people to care for in the household, plus possibly additional medical expenses.