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- My husband and I are in our mid-30s and have term life insurance policies worth $2 million.
- They cost us a total of $100 a month, which I think is a worthy spend for peace of mind.
- Our policies would cover the cost of childcare and my husband’s salary if either of us died.
But the amount of life insurance we opted for wasn’t just a free-for-all. It was a strategic move, based on our children’s ages, childcare situation, and debt.
My husband has roughly $1.6 million in life insurance, both via his work policy and an independent one. While a big portion of the cost is covered by his employer, we pay about $75 a month for both of his policies.
My policy is for $750,000 and costs us $25 a month. Both his and my policies are term life insurance, though we will eventually upgrade to a whole life policy. While our total monthly life insurance cost is $100, to me, it’s a worthy spend.
3 reasons our life insurance works for us
1. It covers childcare
While I’ve been running my own freelance editing and writing business for the better part of five years, I’m also the primary caregiver for our two children, ages 2 and 4. When we calculated my life insurance policy, we factored in the cost of a full-time nanny in our state until our children both reached school age. Then, we added the cost of after-school care.
While this is an approximation for our current state and location, knowing that childcare would be financially handled if I died unexpectedly was key.
2. It covers our debt
While we were lucky enough to have parents who paid for our undergraduate educations, my husband and I both took out student loans for our master’s programs. While I don’t regret getting my master’s in journalism, sometimes the amount of student loans we have can be a bit dizzying. But our life insurance payout would cover both balances if something should happen to either one of us.
Another thing our policies would cover? Paying off the mortgage on our home. I can’t think of anything more comforting than knowing that in the face of potential tragedy, our home is secure and an asset we own, free and clear.
3. It replaces my husband’s income
Replacing a primary earner’s income is the big reason many people opt for life insurance. For us, it was no different.
While I’ve been earning steadily since I went into business for myself, it can’t cover all our bills and expenses. That’s why we opted for a policy that would fully replace my husband’s income until my children were both in school full-time and I could return to full-time work — and pay for after-school care.
How we decided how much life insurance to buy
It’s never easy to talk about death or the potential of losing your partner. But once we became parents, we knew those tricky conversations were necessary. The key for us was sitting down and making a list of all our debt and living expenses, our current take-home pay, and our children’s ages and childcare needs. Then we worked backward from there, figuring out how much we needed to cover all our bases.
Removing the emotion from the conversation helped, too. For me, this was two-fold. First, no one ever wants to think about something bad happening to themselves or their partner, but it’s necessary.
Second, my husband has significantly more life insurance than I do. That’s because he’s the primary earner. Does that mean he’s any more important than me, or that we have gone backward in terms of roles in our marriage? No, and no. It’s purely a numbers thing.
According to the Life Insurance Marketing and Research Association (LIMRA), just 52% of Americans had life insurance in 2022, most to protect their families from unpaid debt, pass down generational wealth, or replace a primary earner’s wages.
While not all these reasons apply to us, paying off debt and replacing my husband’s wages were top of our list. And while no one wants to think about something bad happening to themselves or their partner, knowing that their family will be taken care of does help lessen the anxiety of the unknown. And you can’t put a price on that.
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