Life Insurance

[acutegirl]

I did an online focus group on life insurance the other day. It's my first time doing an online focus group and it was a good experience. I especially note that I think a focus group is a lousy method to get at lots of kinds of information. The 90 minute focus group with 6 people would have yielded much more valuable information if it consisted

Comments

[zimzat]

I agree with your sentiment that life insurance companies may be tricking us to think of life insurance as a gift. For the short-sighted that is likely the best way to sell something intangible within our own existence yet still costs now

[acutegirl]

I agree that it can cost quite a bit to replace the services of a full-time caregiver. But in our case, my spouse would move to his parents. His mother and father would, frankly, provide more consistent and high-quality care than my daughter is getting from me. But, even if he didn't, then childcare in our area costs about $25/day. With roughly 260 work days a year, that works out to about $6500/year. For the first 15 years of my child's life, that works out to about $100,000. Many full-time caregivers also contribute financially to their family by saving money (ie. clipping coupons, cooking meals so the family eats more at home, doing home repairs rather than paying for them, mending clothes, cleaning, bargain shopping, etc.) but I don't do any of those things. If I were to die, my spouse's costs would also decrease by about 15%-20% because I wouldn't be using his money to travel, eat, buy clothing, etc. He would probably save at least $6500/year if I wasn't using up his money

[anonymous]

I think you might be misjudging the cost of child-care, which is huge. While it's a blessing to have family to help out, I think relying on it solely is tricky. Do you have family living by? Who are willing to become basically full-time parents? (Especially young children). Term life-insurance is pretty affordable for small amounts -- maybe keep a small policy until you have enough saved to cover full-time child care costs, and then cancel afterwards. If it's not needed due to family being able to help, then awesome, it could go towards college eventually, but if it is needed, it could keep family relations a lot more rosy

[acutegirl]

I agree that childcare costs can be substantial. In our personal situation, my spouse's parents have indicated strongly that they would plan on providing full-time childcare if I were to die. Even if that weren't the case, the cost to provide full-time childcare is about $25/day in our area, which works out to about $6500/year. My spouse would most likely save that much (or more) if he didn't have to pay for my expenses anymore (food, travel, clothes, gifts, medical care, health insurance, etc.).

Funeral and medical costs are certainly an important concern. It does seem to make sense to have a small life insurance policy to pay for funeral and other death-related costs.

I haven't cancelled my policy yet, I'm just considering it. But these are really valuable things to think about! Thanks!

[anonymous]

Also realize that not everyone that starts residency finishes. Here at my residency it is over 90% complete but still not everyone. This is in line with averages around the country. I would keep the policy. My two cents.

[acutegirl]

Good point! Although, at this point, I'm not sure how employable I really am. Here's hoping my spouse finishes!