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

[JustAnotherManicMummy]

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?

She's not allowed to claim benefits due to her Visa terms. I know they had a problem with child benefit when their DC was born.

Apologies for not knowing more. It's DH's side of the family and they don't discuss these things openly. In mine we just ask!

tinierclanger I get your point... except I'd spend the extra £80 if I had it . There's always something that needs fixing/paying!

It depends on what other assets you have. If you own a house with minimal pension then if you die the kids will get the money from that. If 2 parents on good incomes then unlikely both will die together and the other can support the kids.
I think it very much depends on individual circumstances. Some life insurance policies are so restrictive they are worthless and life insurance is a good money maker for the banks.
If you have health problems and don't earn money then life insurance will be very expensive and a bit silly.

should be minimal mortgage not pension.

oh I see - glad DH moved to the UK "proper" - had his permanent residence a year later

MillyR you asked a question and I didn't answer you.

It's a big change going from average income to being on benefits and given the choice I think most people would choose not to have to rely on benefits.

Polendra's post is a really good example of why.

YANBU - DH works in finance and says this all the time. His advice to clients is before you use spare money for anything else, use it to protect your family.

I don't know Princess Toadstool, I am still waiting for the OP to justify her judgement.

Is she saying that the only people who should be allowed benefits are people who have never been able to work, and that anyone who has had a job but did not get out adequate insurance so ended up on benefits is 'selfish' and should not get disability payments/single parent single wage based tax credits/ money for the carers of their orphaned children?

Totally bizarre thread!

yes - but we have life insurance, if one of us died - the mortgage would be paid off.......but the debts would still be there - we simply can't afford to pay anymore for additional lump sums/monthly payments

OP, we cross posted. There is a big difference between saying that ending up on benefits is a big change and ending up on benefits because you didn't get out life insurance is selfish.

That is essentially the logical conclusion of your argument.

PT I can't say if it's ok or not. That would need to be decided by your dependents.

However, as Reality says it's about your DH working and raising DC. How much would all the unpaid work you do in the home cost to replace?

All the childcare/cooking/cleaning/washing etc.

There's also the person left to keep everything together to think of. Maybe they would like to give up work to look after the bereaved children and a life insurance policy would give them that choice?

I dont' have all the answers. Just more questions really!

Reality, if that is your opinion, fine. At least you have stated it clearly!

I do think this is an issue with the benefits system though. The original purpose of the benefits system was meant to be that it was a form of national insurance. If you were seriously injured, or your child was disabled, or you became a widower, the state would help you.

That seems to have been totally lost from our contemporary understanding of benefits, but it was that social contract between people and the belief that society would help us in a time of need that allowed the system to be established in the first place.

my husband has life insurance as I am a SAHM so if anything happened to him even if I were to get a job now my income would be significantly less than his. Both of us lost one parent in childhood so we know it happens!.

As far as I am aware we have no insurance for illness? This is actually an issue for us now he has been off work for a couple of months this year ill and now we are worried about losing pay wish I had looked into this before now!

Fernie3, that is exactly what happened to us (except that I'm not SAHM). DH had life insurance that covered various forms of sickness and disability. He became disabled and was off work for many months. His employers eventually stopped paying him (although he kept his job and returned to it eventually).

There were so many loopholes in the insurance he had that he got no financial assistance. It had a huge impact on our finances. Loads of policies have so many areas that they don't cover, and people don't realise because they don't forsee every eventuality.

MillyR I'm sorry but I'm not quite sure what you're saying.

I do think it's selfish to leave a family coping with a bereavement and a massive change in financial circumstances because as an individual you didn't want to spend a relatively small amount of money to protect that.

Everything is relative. I had clients in the past who earnt six-figure salaries, kids in private schools, ponies, blah blah blah who in the event of their death would have had to sell the family home, give up the pony and go to a different school - all whilst coping with the loss of their parent. Just because they wouldn't monthly shell out less than they spent on one lunch. And completely avoidable.

There are lots of examples on this thread of more common cirumstances which might be easier to relate to. I appreciate that example is extreme.

YANBU

We both have life insurance. It will only pay out for 1 of us,if we should die before DD is 21. After that nothing.

It would pay out £100k so hopefully enough to ensure that the one left with DD could manage financially with added child care costs etc.

I would rather have had another savings plan which pays out regardless but we couldn't afford that so this was the next best thing.

Mine costs £10 per month and DH costs £20 per month. So the knowledge that we should be ok financially if the worst happened outways the cost.

Should we both die then we are lucky enough to have lots of equity. Also saving plans in place which is due to pay out in a few years, and has already been boxed for Uni costs etc.

I have free death in service cover through work for 4 x salary which would nearly pay off the mortgage (not quite) and also have some sort of death benefits through my two pensions, although I have no idea what the benefit level there would be. We have enough in savings that if I were to die, DH would be able to live on that for probably 2 years if he was frugal, plus of course he'd get my death benefits and the pension scheme cover plus the work cover would possibly pay off the mortgage. The 2 years' worth of living expenses in the bank would cover 2 years of mortgage payments at their current level. If DH were to die, he has got some limited life insurance in place for about £30k plus something through his pension, but again don't know what the level of that cover is. He will be substantially increasing the cover when our baby arrives next year to a sum that would pay off the mortgage and leave some left over. I would also have our savings, which would last quite a while if we had no mortgage. Neither of us has any debt other than the mortgage. DH has already made the appt with the financial advisor to get the increased cover sorted.
People do die. It's sad but it's true, and it is very important to be prepared. I used to do wills and probate and so often people just don't face up to the fact that they WILL die one day, and they'll be leaving behind their family to pick up the pieces.
(We don't have wills at the moment though but that's because all our property is joint, so would pass outside the will in the event of a death - but we will make wills closer to the time Baby arrives).

Don't have a mortgage. Never will. Don't have life insurance, either. Can't afford it. Have NO assets, no pension, no savings. About £7k in debt.

Want to buy it for me?

I'll be happy to let you pay for it if you think I should have it.

Otherwise, try jumping off your moral high horse sometime and seeing what it's like on Planet Reality.

expat read the OP. The first bit.

I did read your OP. Thanks for assuming I'm a moron.

The discussion also moved on to 'no life insurance = selfish no matter what your lifestyle' and 'it's only a fiver a month' and the like.

I had CINII/III back in 2002. I had a breast biopsy this past July - benign, but I still have to list it on applications for life insurance. I used to smoke. I have hypertension.

Ever priced insurance for someone like that who's close to 40 with a HUGE history of heart attack/heart disease on the paternal side and who already has hypertension?

DH smokes. Again, can't afford life insurance.

I think it is a difficult question to answer. It depends what you have, what you want to protect and what you want to pass on.

We updated our wills when we had children with the sole purpose of 1. Specifying who we would like to look after the children if we were to die and ii) how our "estate" (in other words a heavily mortgaged semi-detached house) would be managed for our children's benefit!

I pay life insurance through my work and also have accident cover which would pay the mortgage of in the event of my demise/severe disability. I nagged and nagged my husband for years to get the same because I was really worried that if he something happened to him not only would I have to manage supporting the family through the crisis the thought of losing our home or battling with creditors. Our house is not only our home but also the future for our children (i.e whether we sell it to help them through university or provide them with a deposit for a property of their own when their time comes).

I think each to their own.

You don't have to be right on the breadline not to be able to afford lots of insurance though...

Are rich people without adequate insurance selfish? Well, probably, but if they're rich they probably have plenty of assets to leave and rich relatives too. It just doesn't apply to most of us.
We have mortgage attached life assurance, which is compulsory here, and DH has some kind of insurance from work. He often jokes that hes worth more dead, as the (large) mortgage would be paid off and we'd get a nice lump sum from the work one. Its not really that funny though, as we know of a man who killed himself this year for that very reason.
I don't have any insurance in my name, as being a SAHM/student with no income, I'm pretty worthless,so to speak.