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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To think if you have children you should have life insurance?

148 replies

JustAnotherManicMummy · 14/12/2009 13:14

Just to be clear I am talking about people who can get cover and who have an income/lifestyle to potect but who choose not to spend a few quid per month protecting their family should they die (ie not people with conditions that mean they can't get cover/those without a spare penny and who really do live on the breadline etc)

I am confused as to why someone would insure their car/possessions but not their family's livelyhood?

I work in finance so I find it easy to speak plainly about this - but also because I have seen the consequences of people not taking out cover and something terrible happening. It is heartbreaking.

I can give you an example of what I'm talking about: BIL's wife is from overseas. She is not entitled to claim any benefits and does not work (can't get a job where she lives and needs to look after their pre-school DD). He owns a property which is mortgaged. He will not take out life insurance, despite the fact he is the sole provider for that family and if he died there would be less than £10,000 for his wife and child to live off after his debt has been repaid. I think he is irresponsible.

So, AIBU?

OP posts:
daisyj · 14/12/2009 13:38

I think it depends on who you are expecting to look after your kids when you are gone, and what your arrangement is with them. If you were both to die and your child(ren) were tiny and you left nothing but, say, £20K equity in your house and left guardianship of your children to a family with their own kids on a household income of, say, £30K then yes, it would be irresponsible - if you could possibly afford it you should have it.

Considering that for less than £35 a month DH and I are worth hundreds of thousands if we both died, plus what we get from death in service at work, it makes sense to have it, and would be mad not to, imo. However, it can be VERY expensive to have life insurance if you answer 'yes' to any of the questions re. health and, as angry says, I can see why you might hesitate to spend the money.

JustAnotherManicMummy - we both have 4x salary death-in-service, but have extra on top of that as we can get it cheaply because of our circumstances (ie non-smokers, no health issues). If we had to pay what angry does I think we might not have bothered. So I'd say a qualified YANBU to you. One should probably have it, but I can see lots of reasons why one wouldn't. Your BIL does sound irresponsible, but maybe he knows something you don't that would make it difficult/expensive for him to get insurance... Or maybe he just doesn't realise how cheap it can be...

We've only just got ours, which is why it's on my mind at the moment. I still can't get over how much we're worth dead (with, I can assure you, very average jobs!).

displayuntiltwelfthnight · 14/12/2009 13:39

YANBU at all - the argument that life assurance is expensive is rubbish, it's no more each month than a lot of people pay on things they would see as essential.
It's essential to protect those who depend on your income for paying for the basic things in life and just as you wouldn't not insure the contents of your home, nor should you neglect to provide cover for your children should the worst happen.
Queen interesting that in the other thread you neglected to say you didn't earn an income aside from state benefits, so that would make your situation different possibly.

daisyj · 14/12/2009 13:42

I should add that we don't have critical illness insurance, as that would mean we'd be paying £150 a month. And I know we should, but it's sooo expensive...

ButterPie · 14/12/2009 13:42

Reality, atm they are helping us out anyway. We are very grateful to them, and tell them so regulary, but they do have to help us out here and there when there is more month than money or something big needs buying. It is just the way things have happened, and it may well happen that in the future me and DP finally get our qualifications and decent jobs and our parents need help off us, which of course we will give. Of course, that might not happen, but it does seem more likely than the other scenario.
Would a £5/month policy be possible? In which case I will look into it. I did think of getting a savings account, but no bank will give me one due to my credit rating, so would I be allowed life insurance?
We could do with a will as well, but tbh DPs brother died recently and there was no problem, his dad just went in and shut his bank account and his stuff got distributed amoung his family and friends. I presume with us, the only difficulty would be deciding who the kids would go to, and that is something that will change constantly as the grandparents and kids get older and so on.

Awassailinglookingforanswers · 14/12/2009 13:42

slightly off topic - why can she not claim any benefits? Does she not have "leave to remain" (permanent residence?).

displayuntiltwelfthnight · 14/12/2009 13:44

tinerclanger - not sure if I understand your post - do you have dependants or not?
If you do, then you do need to take out life assurance to protect them should you die, if you don't have dependants and you have another means of paying for the basics without your income,then no you don't need it

Original poster
JustAnotherManicMummy · 14/12/2009 13:45

tinierclanger You ask a good question.

My answer, IME, is that life insurance can get very expensive as you get older. What once cost £20 a month is suddenly £100. And whilst you may end up paying less overall... £100 a month is a lot to find instead of £20 IYSWIM.

But you have cover - so won't tell you off

Morloth that is very nicely put.

OP posts:
Awassailinglookingforanswers · 14/12/2009 13:46

we both have life insurance, it's very minimal though - would pay off the mortgage and that's about it. Costs us as much per month as a weekly shop does .

displayuntiltwelfthnight · 14/12/2009 13:47

ButterPie - there should be no reason for you to be refused life assurance unless you already have a life threatening illness
as for contents insurance, it's nnot just for valuables, it would cover everything you own - clothes, shoes, kitchen equipment, tools, books, furniture, mugs, you name it, if you own it and it was all lost in a fire or similar, having insurance would mean you had the means to replace it all. It isn't expensive but if you don't have it and lose everything then that is when it is expensive having to find money to cover the cost of repkacing things.
Good luck finding out about the life cover. Have a look at moneysaving expert.com as he checks all the latest good deals on all things finance related

SparklyGothKat · 14/12/2009 13:47

butter, I pay £7 a month and DHs is about £8 a month. Its only payable till Ds2 is 16, so if we die before he turns 16 then they pay a monthly payment to the kids. Its with Lloyds

displayuntiltwelfthnight · 14/12/2009 13:47

ah, sorry tinierclanger, must have missed a post

tinierclanger · 14/12/2009 13:47

Yes, we have a DS. As I said in my earlier post, we both have protection through our pensions. I may have misunderstood earlier question, I thought OP was implying we should have a private policy as well, as our death benefit is tied to our jobs.

I still think there is no 'should' about though. It depends on each family's circumstances.

SparklyGothKat · 14/12/2009 13:47

butter, I pay £7 a month and DHs is about £8 a month. Its only payable till Ds2 is 16, so if we die before he turns 16 then they pay a monthly payment to the kids. Its with Lloyds

SparklyGothKat · 14/12/2009 13:48

whoops sorry for double post

MillyR · 14/12/2009 13:48

I am bit confused by this. You seem to be saying that a person who is on benefits and has no life insurance is not selfish, but a person who has a job but not life insurance is?

Surely the whole point of having a benefits system is to support people who find themselves unable to cope financially due to some sort of predicament, such as death of a spouse!

Original poster
JustAnotherManicMummy · 14/12/2009 13:49

daisyj we're in the same position. Worth lots dead... not much alive.

DH currently sleeping with one eye open after his employer made his death in service ridiculous amount recently

OP posts:
GhoulsAreLoud · 14/12/2009 13:50

DP has it but I don't because I'm covered through my public sector job.

Think our mortgage is covered separately though.

Awassailinglookingforanswers · 14/12/2009 13:50

psst JAMM - why can't your BIL's wife claim any benefits??

tinierclanger · 14/12/2009 13:51

Ah, OP, I see what you are saying - but if you pay £20 a month for many months of cover you don't need, actually by not paying that and saving it instead, you subsidise the later £100 a month that you do need. IYSWIM

Spectroscopy · 14/12/2009 13:51

YANBU

It amazes me. Just to be clear, I don't think I lot of people fully read your first paragraph and obviously that disclaimer applies to my reply, too!

If I or my DH died, our mortgage would be paid we would get a lump sum on top of that amount AND an income that would mean we could manage if we didn't feel able to work until our son was an adult.

I guess a lot of people don't think about it. My mum died when I was a child so I am very aware that these things do happen. I know the mortgage was paid off then which gave my dad the money he needed to pay for the extra childcare, but he definately still needed to work full-time (shift work too). My brother being 12 yrs older helped a lot as he did a lot of the needed childcare.

Awassailinglookingforanswers · 14/12/2009 13:52

we simply afford to have anything that gave us anything more than the mortgage paid off, £52 a month just for that for both of us (and no it's not a huge mortgage - and we're not ancient either)

Original poster
JustAnotherManicMummy · 14/12/2009 13:52

alfa I don't know the details of her residency (haven't asked) but I do know that she doesn't have leave to remain.

It's a bit complicated because they live in a crown dependency. I can't really give more away as too much identifiable info.

OP posts:
Poledra · 14/12/2009 13:54

I do agree with JAMM's assessment, having seen something similar firsthand - a close relative died in an accident while still young. His son died with him.

He had his own business, earning well, but spent up to the limit too. No insurance, either for the business or personal. He left a wife (who hadn't WOH since their children were born) and daughter with nothing but debts. His daughter turned down a place at university as she felt she couldn't put any more financial hardship on her mother.

They could have afforded it, they chose not to

ButterPie · 14/12/2009 13:54

Brill, I will look into it. I really don't know who would be the best guardian for our kids though. DPs parents live nearby, so it would be less disruptive for the kids, but they are older than my parents (his are in their 60's, my mum is in her 40's and dad is in his 50's) and so could find that, in a few years, the kids (who are both currently under three) could be too much for them. My parents are younger, but not as well off, and still working as well as caring for my grandparents, and have said that they want to travel once they don't have those responsibilities. My sister is currently single with no kids, living in London, but she does have a good job and is planning on having a big family eventually. My other sister is only 16. Everyone would love to have the children. I have no idea how to even begin choosing.

littleducks · 14/12/2009 13:56

We are on a low income atm (damned recession) dh is currently the sole earner. We do have life insurance, dh would prefer a higher payout (i think its like £100.000 ish) we have two kids, and cant afford higher premiums atm.

If we were to both die, im sure my parents would help them out financially as i know they are in my parents will and they have a figure of inheritance for me too. My mil has no spare cash but would def do all she could, though would prob be practical help.

We intend, somewhat reluctantly, for our children to go to dhs bro and sil, who have 3 children of their own, although they do care for my kids, i would never want to leave them custody of my children without something to try and fund that.

If however for whatever reason i was going to ask for my children to live with my parents, on their income i would be less concerned.

Also life insurance can seem confusing to those with little money, their should be simple low premium policies available (where the salesman doesnt keep trying to push up the cover you want).

Neither of us have pensions though so i suppose different priorities,

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