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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:
Awassailinglookingforanswers · 14/12/2009 15:47

display - but the point is that is often IS expensive.

And what financial security would be left to my children if one of us should die? Not a lot - mortgage paid off sounds lovely.....but it does't take the debt away, that's still going to need to be paid from somewhere, and our costly life insurance won't give the remaining parent any extra money/lump sum to help them out.

QueenOfFlamingEverything · 14/12/2009 15:49

Fact is, for the vast majority of people on the breadline, any scrap of spare money is going to be spent on now.

Yes, I probably could cut back even more, in order to insure my life. But tbh I'd rather DD and I were able to eat better food today, or keep the house warm enough that we aren't wearing gloves inside.

Oh and as for the 'get rid of the internet/mobile' line of thought - er, no. We already ditched the TV as I can't afford the licence. I am not prepared to completely isolate us from any kind of communication - we don't have a landline so the mobile is actually pretty essential anyway.

emsyj · 14/12/2009 15:50

I personally think that you shouldn't buy a house/take on a mortgage that you can't really afford, but then DH and I are quite risk-averse people in a financial sense, and we like feeling secure.

To the poster who said they'd prefer Sky tv rather than 'obsessing over their own mortality', well as I said previously, fine with me! It won't affect me one jot if you or your partner drop dead, so I don't care. My personal preference is financial security, but your preferences are up to you.

displayuntiltwelfthnight · 14/12/2009 15:52

our life cover will pay a lump sum in addition to the mortgage being paid off. It depends on what cover you choose to take out.

Awassailinglookingforanswers · 14/12/2009 15:52

emsjy - who said anything about taking on a house/mortgage that they can't afford. Circumstances change you know - not always for the better

emsyj · 14/12/2009 15:55

Um, slushy06 at the top of this page has just taken on a mortgage she can't afford...

'I don't have life insurance me and dp had to scrape every penny together to get our mortgage as we are not well of everything is cut back to it's lowest and I spend most days going through reduced food racks in order to make a cheap meal.'

'When we bought the house we thought dp would get a pay rise in 6 months which is when we would take out life cover, however it has been about 13 months and company are fobbing still doing a bit bad but have promised a rise in march.'

They've taken on the mortgage on the basis of an expectation that her DP would get a pay rise, but in the current climate pay rises are quite hard to come by. Their circumstances HAVEN'T changed - they've stayed the same. They were expecting a change for the better.

Awassailinglookingforanswers · 14/12/2009 15:55

display - we took out what was available when we took the mortgage out, there was no way on earth we could have afforded the lump sum ones as well - not at the prices we were quoting then.

We did look into changing a few years back, but the prices were even higher.

Someone has just pointed out about the reality of living in the "here and now" for those on the breadline. We were "lucky" in that when our circumstances changed for the worse we already had the life insurance, so we had to factor it into our reduced budget.

Everything else is the "here and now" though. It's hard to think about the possibly "what ifs" - when you have children to feed and clothe and keep warm.

Awassailinglookingforanswers · 14/12/2009 15:56

I didn't see that post - it's not on the top of any "page" for me.

Stigaloid · 14/12/2009 15:57

YANBU - it is the first thing we did. If i die there is enough money to pay off the mortgage on our house so DH can then put that money towards a nanny or childcare costs to help him raise our DC. Similarly if he dies our mortgage will be clear and i will be left with some money to help raise our DC. If we didn't have it and DH died i would lose the house and everything. I don't earn enough to cover the mortgage and bills and we would be homeless. It is the sensible thing to do.

displayuntiltwelfthnight · 14/12/2009 15:57

emsyj - well put.
dh and I also don't see ensuring financial security for our family as "obsessing" about our mortality!
We're all responsible for our own finances, if you don't want life assurance, don't take it out. Personally I like to know that if anything happened to me and dh, our children would be looked after financially.

displayuntiltwelfthnight · 14/12/2009 16:01

"It's hard to think about the possibly "what ifs" - when you have children to feed and clothe and keep warm."

I'm afraid that I am the opposite - it is exactly because we have children to feed, clothe and keep warm that dh and I consider the "what ifs" in life.
Before we had children it wasn't so important, now we have children it is vital to us to ensure that we have covered all eventualities so that if faced with losing their parents they aren't also faced with added financial burdens or anxieties.

Awassailinglookingforanswers · 14/12/2009 16:04

I'm sorry display - but if you're living on the breadline and you have a choice of spending £60 a week to feed your family, or £30 ( which would you choose? If you had the choice of puting the heating on when it's sub-zero outside.........or paying life insurance, of putting clothes on your child, or paying life insurance.

If you think it's so easy to ALWAYS think about the future while living on the breadline (or below as many are) then obviously you've never been there.

QueenOfFlamingEverything · 14/12/2009 16:07

display, you are coming across as woefully ignorant of the financial reality for many many families.

expatinscotland · 14/12/2009 16:09

Well, the HA wrote today with a poll to guage if tenants would like teh option of not just electric storage heaters (sooo expensive to run) or electric 'wet' heaters but GAS CENTRAL HEAT!

Hallelujah!

Hell yes, please!

It costs a lot to keep them warm and where we live in Scotland, it's pretty damned cold.

lovechoc · 14/12/2009 16:12

DS will be left plenty when I kick the bucket, so life insurance isn't really an issue and I'm sure there are others out there who are the same. Not claiming to be rich, but we are very careful with money.

jasmeeen · 14/12/2009 16:14

In response to slushy06 - I do think that you shouldn't have taken on the mortgage.

In response to the should you/shouldn't you get life insurance I have to admit that before the kids were born we didn't bother with it. But the thought of one of us dying and leaving the other with 3 kids and no roof over our heads has made us get life insurance.

For those that say it is cheap, it is as long as you have a great medical history. DH has had cancer and I also have some medical issues which means the premiums we pay are 3 times the original quotes we had.

As for critical illness cover, those policies actually have a poor record of paying out and I would not waste the money, even though I know how a critical illness (DH's cancer) can impact life and income.

BananaPudding · 14/12/2009 16:20

We feel it's very important to us to carry life insurance and have a will stating guardianship of dd were somethingto happen to us. I have private life and critical illness insurance and dh's is provided by his job as he works a low-level government job. I also carry a private life insurance on dd, not in case something happens to her but because she can carry it all her life and the premium won't be raised on her.

All told we pay about $150 or approximately £200 per month which is shocking to me once I've reckoned it up! We are not rich or even well-off, but it gets deducted from our paychecks and we don't miss it anymore. We do sacrifice some I suppose because of that missing money, but I believe it's worth it.

I wouldn't say parents who choose not to have life insurance are irresponsible (exceptions noted) but neither do I understand that choice.

CatIsSleepy · 14/12/2009 16:21

JAMM- dh and I both have work pensions that pay out a lump sum in the event of our death. we don't have life insurance in addition to this-do you think we should?

Ripeberry · 14/12/2009 16:24

I thought it did not matter if you were earning and income. If you pay something for life Assurance then your familly (kids) would be cared for.
Got NOTHING to do with your income.
The life of a parent is priceless to a child.

Awassailinglookingforanswers · 14/12/2009 16:27

of course it's got something to do with your income - it's got to be paid for

I nearly fainted at the £200 a month mentioned in the previous post - that almost my entire months shopping budget for 5 of us!

expatinscotland · 14/12/2009 16:31

'Got NOTHING to do with your income.'

And if your income does not stretch to affording it because of health issues?

Believe me, I'd love to be able to magic up money! I know a lot of people who could use it.

AngryFromManchester · 14/12/2009 16:33

Doesnt the cost just signify the amount you are insured for and whether it includes critical illness cover?

I just guessed ours was high because dh's family have a history of heart attacks and mmy gran had one before 50 and we have a high mortgage. He still gets cover from work but the payment would only cover part of the mortgage not the whole amount

I am suprised some people are paying less than a tenner. What does that cover?

emsyj · 14/12/2009 16:34

I think what Ripeberry means is that you don't just need life insurance if you have a high income that your partner/children depend on, but that it is valuable even for those who have low earnings and/or other assets - it's always valuable to have it. I don't think she was commenting on affordability, more the value of the product itself regardless of whether the family would struggle financially if the relevant person were to die. E.g. if you're a SAHM you might say 'I've got no income so it wouldn't matter' but of course if you were to die, your partner might need to pay for child care, might want to take a year out of work to be with the children, may wish to work part time etc. I don't think she meant that you should have it even if you can't pay for it!

emsyj · 14/12/2009 16:38

We used to pay about £7 a month each for decreasing cover when we first took out our mortgage - it covers the mortgage amount and that's it, and its value decreases with the term of the mortgage, i.e. if you have £100k at the start, it would pay out £100k, then after 20 years if you have £10k mortgage left it would only pay £10k. Level cover is more expensive - it pays out a fixed sum that doesn't decrease and doesn't fall away when your mortgage is paid off.

peppapighastakenovermylife · 14/12/2009 17:11

We have £100,000 of life insurance cover for £6 per month (plus our mortgage cover). If something were to happen to one of us (or god forbid both of us) then the children or whoever was looking after the children would be financially secure. We have taken it out with an end date of when DD is 25 as I hope they would be able to look after themselves by then.

We are lucky to be able to afford that yes but I do see it as a big priority.

Actualy this reminds me - I must make sure all the documents are safe together as DH has no idea where they are...

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