Archive for September 1st, 2007
Yes, I know that there are stay at home dads also, but this run of posts is about women and life insurance. Honestly, the title of stay at home mom is a bit of a misnomer. It should be more like “stay at home, do more jobs than than is humanly possible, while simultaneously raising children slave”. I only throw in the slave because I am honestly not hearing a lot of chat about the size of paychecks these moms are hauling to the bank.
I remember seeing this article last year, that while an eye opener, really didn’t surprise me that much. I have always been amazed at everything a stay at home mom can accomplish in a day and the length of the day that is required to get it all done.
So, given what it would take to financially replace a wife, does carrying a token $50,000 or $100,000 policy really make sense? It used to be that insurance companies really stuck to the rule that they would only insure a homemaker for half of what the husband was insured for. One of the crazy things about that rule was that it didn’t matter if there were 6 children or just 1. It didn’t matter the ages or the health. Tell me the loss is the same if you are comparing a severely handicapped child left behind to a healthy child. It also didn’t take into account that the husband might very well be under insured. I am working with more and more companies that are willing to look at the mother under a different financial set of rules.
The are plenty of ways to substantiate the economic loss of a homemaker and if that adds up to more than 50% of the husband’s insurance, so be it. Another item that I think should be considered when adding up what the insurance needs are, is one year of the husbands salary. Why factor his salary into your insurance? Just my idea of the kind of thing that insurance can provide the opportunity for. If the insurance includes a one year salary replacement for the husband, especially when the children are younger, the husband could actually take a sabbatical and spend a year with his children at probably the most needy time in their life.
Bottom line. Let’s get real about your role as stay at home moms, or mothers who work part time and still have to do all of the work to keep the home front afloat. If you run into a situation where an insurance company tries to limit the amount of insurance, find an independent agent who can show you ways over that hurdle. Don’t let your husband’s underinsurance keep you from properly insuring yourself.
September 1st, 2007
I will be looking at life insurance, it’s need and it’s impact, for women in various roles. Let me be very clear that I have no bias that leads me to believe one role is better for a woman than another. I would hope for all women that the path they choose is fulfilling.
I live in a two income household. Our children are grown. While I have done well with my insurance business, my wife has done equally well as owner of multiple Curves franchises. Before that she was a nurse and brought in substantial income. She is an integral player in our life budget and our plans for the future. If she died prematurely with no or inadequate life insurance, my ability to continue on would be damaged.
Having life insurance is all about whoever is left behind having choices. In most cases, with little or no insurance, all of the choices would be steps backwards. I might have to sell our house and downsize. If I sold the house, since my office is on the same property, it would affect my business. I might have to liquidate assets to make up for the lost income. My lifestyle would have to change since we always combine income for things like vacations.
Just as when figuring out how much life insurance is adequate for a man, the same process should be followed for women. Don’t get trapped into old ways of looking at the subject. A rule of thumb when I first started in the business was that a wife should have about half as much insurance as the husband. While that rule of thumb was left behind some time ago, in a way it still lingers. Men, on average, carry almost exactly twice as much life insurance as women.
Our wives face the same perilous path through life that we husbands do. While statistically they will outlive us, we never know when they will fall victim to one of the leading causes of death
for women today.
Bottom line. In almost all two income households, the loss of one of the incomes is huge. Each income should be analyzed not just by it’s monetary size, but also for what it accomplishes. I think we probably all know couples where, for instance, the husband makes $50,000 and the wife makes $30,000, but more of the bills are paid from the wife’s income and more money is blown from the husband’s income. In a situation like that, the loss of her income might very well be more damaging than the loss of his income.
September 1st, 2007
Last year when my wife and I reassessed our life insurance portfolio, I recommended that we had another policy for both of us. She understood very well why we should it increase it on me. The business had grown, and there was simply more at stake if I were to die. Not really noticing that kind of change in her situation, she asked why I thought we should have more coverage on her.
My answer was simply this. The price of property in Belize has gone up! Actually a standing joke, broken down into logic, it’s an accurate answer. A long time ago she asked me what I would do if she died. I told her then that I would likely run away from everything, and Belize would be my first choice.
The death of a spouse is traumatic at the very least. And, while ultimately we might not make any huge changes, it causes a lot of surviving spouses to re-think where they were headed. It could be that you have kept a job that you weren’t horribly in love with because it kept the bills paid and provided for your family. It could be, like me, that your wife is a part of your business, and there would be a financial as well as emotional loss if she died.
Whether I would really go to Belize or not, who knows. I certainly hope we get to spend many more years visiting Belize and other places together, but if you have adequate life insurance on your spouse, you have choices.
In subsequent posts I will be covering all aspects of life insurance for women. After all, they’re not all married. I will lay out my thoughts on life insurance for single women, single mothers, stay at home mothers, working wives and mothers, and women who own and run businesses.
Bottom line. No different than men, where you have a responsbility, you have a need for life insurance. Women in general outlive men, but when it comes down to the reason that most life insurance is purchased, premature death, men and women are on pretty equal ground.
September 1st, 2007
