Life Insurance? How much is too much?
By jolenegreen
@jolenegreen (1209)
United States
June 28, 2007 5:38am CST
Do you think that having alot of money on yourself or your family is ideal? Or do you think it is too much? How much do you think a person should carry on one another or theirselves?
Its a very touchy subject and we all hate to think about it but what would happen if someone in your family died? DO you have enough to cover funeral expenses? What about bills while you are taking time off to grieve?
I have very good insurance at walmart. Life insurance that is (and thats about all!!!) I only pay like $3 a paycheck for each person to have close to $200,000 life insurance Policy. The other day I was looking into my info on the computer at work and a lady was sitting next to me....she glanced over and looked at my info. And them replied....YOU HAVE THAT MUCH ON YOUR CHILDREN??? I replied back...YESALSO ON MY HUSBAND AND MYSELF. She said...DONT U THINK THAT IS WAY TOOO MUCH??? I said NO. I asked around to to other coworkers.....they agreed with her...that it was too much! WOW! This seemed sooooo strange to me. Here I am looking for ways to take care of my family if something should happen to us and they are telling me it is too much. WOW
Here are the things I am thinking about
1. Funeral Expenses
2. If I died, and hubby was the only one working, taking care of our children, I would want our car loans and house loan paid. MOney for the children to attend college.
3. If one of my children passed (GOD FORBID) I think that every mother here knows....COULD WE GO ON???? COuld I work? I still have another child to think about.....but what if I couldnt work.....what if I got sick from depression or something....there are still bills to be paid....still one other child...u know?
Are theese reasons bad reasons? Everyone looked at me like I had 3 heads or something. I am only thinking of my family. Is this wrong?
4 people like this
6 responses
@pillusch (1147)
• Mexico
29 Jun 07
I look at it from a practical point of view, and the truth is that where I live most insurance companies are more crooked than in first world countries (where I wouldn't trust them, either). They are always on time when it is about collecting, but if you need them and it's your turn to collect they come up with all kinds of dirty tricks so that they don't have to pay you. So I don't bother, really.
@laydee (12798)
• Philippines
29 Jun 07
That's definitely such a bad thing to say. Maybe you didn't approach the right type of insurance company.
If you want to pay low premiums then expect a low service. If you want to be service well. Expect that it costs too.
If you availed your services to a very good insurance company. Then they won't need to put dirty tricks so they won't be able to pay, they have a lot of money and your coverage isn't going to shut them down. This is a highly regulated industry, you cannot be a huge company if you don't have the ability to pay.
So before complaining, check first if the company your dealing with is something big or is it just a backyard type of company.
@KrisNY (7590)
• United States
28 Jun 07
I honestly think that the other woman should not have been looking at your personal stuff at work! I think it’s a family choice- how much insurance do you want on each person- I feel it’s better to have too much than not enough- The only problem with having it at work is what will you do if you leave work? I’d check into picking it up elsewhere also- MetLife or something like that- It’s a great time to get it for your kids to- that way they can keep it forever when they grow up- check into the kind that you can turn over into cash- for them if they choose to do that when they are adults—and get their own. I have about what you said on me- I don’t have that amount on my daughter- but I have enough. So really it’s a personal choice- and I don’t think you are crazy!
@blackbriar (9076)
• United States
28 Jun 07
Jolenegreen, your not the one with 3 heads, they are. There is no such thing as too much with life insurance. Your looking ahead and making sure the family is well covered in case something happens. I can only afford $50,000 policy and hubby can't even get life insurance now. No company will touch him because of his asthma and stroke so if something were to happen to him, my daughter and I will lose our house cause he pays the mortgage plus will have all his bills to worry about. I'm limited on what I can do work-wise so I can't just go out and get a decent full-time job. Lord knows I tried for years but with my bad back, I can't sit,stand,lift, bend, etc for very long. I work part-time thou which does help with our money situation. Just wish I could afford the policy you have.
@dlkuku (1935)
• United States
29 Jun 07
I used to sell life insurance and we used to suggest that people buy at least ten times the amount of their yearly income, to cover that loss by investing and collecting off the interest. We also would suggest that children only have enough to cover burial expenses because normally there isn't a loss of income in that case.
But you have a point, it may be very difficult for a person to immediately go back to work after the loss of a child.
We bought our house last year and then we bought a policy to pay our house off if something should happen to either of us, we also have a waver of premium on the policy that if one of us gets hurt or disabled, the insurance will pay my monthly mortgage payments.
On our car loan, we were able to purchase insurance with the loan that will pay the car off if something happens to my husband.
And my husband has really good life insurance through his union at work which we don't pay a penny for.
@laydee (12798)
• Philippines
29 Jun 07
You know what, many fail to understand that there are 2 possibilities in life. One possibility is 'Dying too soon', this is where there is a huge problem on the people left behind. The other possibility is 'Living too Long', this one is when you live beyond your capability of spending for yourself.
When a person buys his life insurance, yes he does answer the first possibility but it doesn't answer the second one. If your focus is this possibility then the easy formula is whatever your annual income is multiply by 10.
On the other hand, even if you are protected very well, this doesn't really assure you are protected against living too long. What ever happens if you outlive your money? where will you go?
That's the huge mistake of a lot of people. They buy life insurance hoping that their troubles are going to stop.
A good financial foundation entails this one. If you have this one, then you will really be able to sleep well.
6 Steps to financial security:
1. Increase cash flow - you should find ways to check and balance the amount of money that is coming in. The more sources of money, the better since in case one source shuts down, you still have back up.
2. Manage Debt - most people live paycheck-to-paycheck because most of their funds go into debt. You must find a way to clear your debts as early as possible. Plus, once your debts are clear, do not add in more debts!.
3. Create emergency fund - this is around 3-6months worth of income saved off for emergencies that may arise.
4. Protection - this is where insurance comes, you must have the right equivalent of insurances.
5. Build Long-Term Asset Accumulation - these are investments where your money grows even though you are not working or doing anything about it. Samples of which are stocks, mutual funds, treasury bills, etc.
6. Estate Planning - this is where you think about the estate taxes you are going to pay for transfer of land and other assets.
There's a way to manage each but I can't post it here, because it would take too huge a space. I'd be really happy to help you out if you want to.
By the way, these are not from my mind alone. I work as a financial planner that's why I know these stuff. And I give it for free so that many would know.
If you just learn how to make these 6 steps work for you then you could sleep better.
I hope I had helped.
