Amount of life insurance for dual doctor couple?

[eaglecap]

My wife and I are trying to decide how much life insurance we should carry for the next 20 years.  We are both fresh grads, she is internal medicine and makes $200k per year and I am a dentist and make $140k per year.  At some point she may go down to part time when we do have children.  We have no kids, own outright a $400k house and she has $200k in student loans.  Both of our cars are paid for and we have $50k emergency fund and $50k in retirement funds.

We are considering 1 vs 1.5 million for each of us for term life insurance.  What do other dual doctor couples out there generally insure for?  Is life insurance even needed for dual doctor couples?

[The White Coat Investor]

You could argue that you don't need it until the children come along very easily. At that point I think you've got a good argument to carry less than a couple that is a doc and a stay at home parent, but it's a very individual decision. You really need to think through the plan for each of these scenarios:

1) You die- what happens?

2) I die- what happens?

3) We both die- what happens?

If the outcomes aren't acceptable without insurance, then buy insurance.

[EH]

I'm not dual physician, but agree with above - I'm not bothering until there are kids. I can live off my salary just fine, but do have a free 4x salary policy from work that would allow my lower paid spouse to stay in our house if I died. I'll have to re-evaluate if we have kids. We live in a very HCOL area though so I do know some that would definitely need life insurance sans kids just to carry the mortgage on two physician salaries.

[DoubleMDs]

We are dual physicians. We carried no life insurance until we had a kid. Then we got 250,000 on her and 500,000 on me (basically enough to pay off remainder of loans, go 6 months without working if absolutely necessary and still have some nest egg leftover). Policies are 20 yr term but hopefully won't even need them for that long. For less then $50 a month it's not exactly a huge expense anyway. Really all depends on your lifestyle and what you think one or the other would need.

[jhwkr542]

Pathologist here, wife is a pediatrician. I'm finishing up fellowship in 2 mos (!!). 2.5 kids. I'll probably get a $1M policy for myself and none for her. She'll struggle to keep up with expenses on her salary once we get finally settled into a new home in a few years. Nothing on her because I'd be able to stay afloat financially. Agree with WCI. It depends on your lifestyles, relative incomes, and maintaining it once either one passes.

[Noah]

The issue I have is that it is so cheap, why not get a little bit more? Also why not get a policy early in case you become uninsurable or develop a pre-existing condition even if you don't need one now but will need one in the near future? Think about what you do as a physician in your MDM section. I often write "low suspicion for MI but can't r/o CAD etc." This is true but I can only imagine that insurance companies can grab on one of any number of medical records to increase rates or make it more difficult to get coverage in the future. I tried to get a 1 million 20 year term policy for this very reason as it would cost me $31 a month. Unfortunately I was put into a high risk group since I just went on a scuba diving vacation and answered the diving questions truthfully, ended up deciding not to move forward with the policy.

Why save $20-$50 a month now when it could make life so much easier on your family and spouse if something were to happen? There are much easier ways to save an equivalent amount through alterations in daily spending.

[jz]

@Noah,  If you die young,  your wife will remarry and children will have a new daddy.  How much do you want to support the happy new family?

[childay]

We are dual physician, one child.  Have 1M policy on both of us.  Consider if you both die.  If we did not have children there would be no need for the term life.  If you are planning on kids go ahead and get it now.  We will probably cancel the policies (and our disability policies) as our NW increases and we are able to self-insure.

[lernd]

I think one thing to consider if there are children involved is the added expense of child care in a single-parent househould.  Could the single parent still work full time with young children (particularly the schedule of an MD or anyone else in 24/7 healthcare)?

[Dicast]

Dual physician household with a 2 year old.  We carry 20 year term, 2 million for me, 2 million for her.  $100 a month for me, $60 a month for her.  Sure, either one of us could die and the other could make do without any money if we just worked the same or maybe a little more.  We however like to spend time with our daughter and would probably want to work LESS if the other person died.  Once our daughter and hopefully other future children would hit school age it might not matter quite as much.  I guess if we both die it is a jackpot for a daughter.

[westcoaster]

Dicast wrote:

Dual physician household with a 2 year old.  We carry 20 year term, 2 million for me, 2 million for her.  $100 a month for me, $60 a month for her.  Sure, either one of us could die and the other could make do without any money if we just worked the same or maybe a little more.  We however like to spend time with our daughter and would probably want to work LESS if the other person died.  Once our daughter and hopefully other future children would hit school age it might not matter quite as much.  I guess if we both die it is a jackpot for a daughter.

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Same boat here and reached same conclusion independently. My wife and I essentially insure eachother to some extent. If/When we have another child, I think we would probably bump this up with an additional 20 year term 1 million policy each which would create a bit of a ladder effect. The more I think about a possible early death, the more I want insurance.

[TheGipper]

Dual physician family, radiology and IM, 4 young kids.  Large home mortgage.  We may have over done it, but stacked term policies of 2M (30yr)/3M (15 yr) for me and 1M (30yr)/2M (15yr) for her.  Got policies in residency when rates were very cheap.  Will drop the 30 year policies eventually when reach FI. If had to do it over, would have gone with the "annual renewable" graded premium option, to start off with very low premiums, with plan to drop before break even point at 19-20 years.

[Zaphod]

jz wrote:

@noah,  If you die young,  your wife will remarry and children will have a new daddy.  How much do you want to support the happy new family?

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Seriously, this comment comes up every time. Are we in middle school? If you die, you're dead, you're not going to care at all. If you love your spouse, why wouldnt you want them to find some happiness after? Life insurance is very cheap, you dont need 20 million of course, but this response always shocks me. Do you really think you'd be petty in death?

I sure hope if I died that my wife and kids got to live out the life we had hoped/planned for and all had someone around to fulfill their needs.

[conniebird]

Women - recommend you get it BEFORE pregnancy. Lots of companies may temporarily  deny coverage or wait to make sure pregnancy was "healthy". I opted to sign up for it since I had squeaky clean labs/med history with getting disability coverage. Might not work for everyone, but timing wise was good for me - getting married and planning kids in short order. If it wasn't in short order I may have delayed it. But I know peeps that delayed and ended up with bad health issues and now they are stuck...

[Allonblack]

Was just talking to someone this weekend about how they spend thousands of dollars a month on life insurance. Seeing what people are paying on this thread makes me wonder just how much of a staggering amount they must be insuring for. They didn't say it was term, but still.

To answer OP (yearly expenses w/ kids)/.03+major non-recurring life expenses you want to pay for (ie college) = 2 dead parent insurance need (2DPIN). 2DPIN-living parent income = insurance need for hypothetically dead partner. So if you spend 60k a year and want 100K each for 2 college tuitions 2DPIN =2.2M Want to pay for 2 med schools. = 2.6M Spend 100k a year instead of 60 add an extra 1.3M.

To restate with less numbers. Worth more dead than alive -> overinsured. Worth more alive than dead -> underinsured. Worth the same dead or alive -> just right.