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I don't need life insurance...am I right?

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  • I don't need life insurance...am I right?

    My wife and I are both currently 4th year med students (match coming soon!), I'll be going into EM and she IM. I've been following WCI for a year now and of course am trying to get my finances in order and go down the check list of things to do as an intern...and something I don't think I need is life insurance, for either of us.

    My reasoning: 1) we will both have incomes that on an individual basis could support the kind of lifestyle we want (we aren't spenders and don't want the 10,000 sq/ft house or new Tesla roadster)
    2) for many different personal reasons we don't want children. We'll have 529's for nieces/nephews but they won't depend on that if for whatever reason it is cut

    We plan on getting disability insurance asap but don't feel like we need to spend the money on life insurance if we have no dependents and we would be alright without the other's income. Of course things would change later on if we accidentally get pregnant etc. and I know premiums would be higher if we picked up life insurance later on in life but does that "what if" justify getting it now?

    Thanks for the help!

  • #2
    Agree with your reasoning. Later, if you have financial dependents, you can add it. Do you need disability insurance? Could you each be satisfied with each others earnings.?

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    • #3
      You probably don’t need any. It wouldn’t hurt to get a cheap, 10-20 year term policy to cover your student loans and your spouse. It would only set you back a few hundred a year, but it’s not in any way necessary.

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      • #4
        I think the only reason to get it would be dependent on your student loan status. If you've refinanced and they don't get forgiven at death, then the other person probably won't want to be in the hook for $200k or whatever. Otherwise, no, you don't need term life.

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        • #5
          But life insurance is so cheap.  And I'm a real cheapskate when it comes to stuff like insurance.

          If you poop out, IMO it'd be a nice thing for your wife to get a little extra cash to ease her burdens, give her flexibility, help her in between jobs.

          Plus there's always that insurance salesmaney reason of preserving your insurability.  Which has some merit.

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          • #6
            i think once you start your residency you usually have option to buy from your employer. Whatever HR offers gor group life insurance buy the maximum you can for a few bucks a month. Better than nothing.

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            • #7
              As you go through life, you may find that it is not so black and white.    Generally if you work for large institutions, they will provide a small life insurance policy as part of their benefits.  That would probably suffice as long as your plans do not change.

              Sometimes however even though you do not plan on expanding your lifestyle, it does increase--just because you do have more money.  This is not something to feel is a bad thing inherently.  Sometimes your income just permits you to spend money on items to make your life better.  why not?  you can't take it with you.  maybe you support someone else who can't make money as readily and improve their lives.

              In your shoes, knowing what I know now, I would think the biggest risk is what Craigy alluded to--if one spouse were to die, it might be nice to have the opportunity to take some time off.

              Need being the operative term-agreed that you don't need life insurance.  however, it might be nice to take care of extended family, if something were to happen to you.  there are lots of maybes where life insurance might offer opportunities at a difficult time.

              ymmv.  hopefully never becomes an issue.

              respectfully, i think you may consider that you are possibly barking up the wrong tree and trying to lock down costs too efficiently.  make sure spouse is on board with whatever you decide. 

               

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              • #8
                Thanks everyone! I think I'll at least get a few quotes and see if it is just too cheap to pass up, and like someone mentioned it would be nice to have a little buffer for the wife just incase something were to happen

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                • #9
                  We could definitely both be satisfied with each other's earnings if either one of us were to become disabled! My biggest concern would be becoming so disabled heaven-forbid that healthcare costs become so high it became a stress on one person's income? is that a realistic worry? Honestly don't have a true reason to think it would, just more a concern

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                  • #10
                    If you don’t have much savings, even a $100k policy could be helpful for burial costs, potential spouse leave of absence, etc. You could probably get a 10 year policy for $100 per year.

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                    • #11
                      Assuming you are in great health a $1 million policy costs about $20 for each you and your wife.  $500,000 is about $15 per month and $250,000 is about $12 month....Super cheap IF you want it.  If you don't want it don't buy it, it is ok to tell someone nope not interested in that.  With our clients we always put out several options that they maybe interested in but if they don't want it then we just simply drop it and move on, no big deal.
                      Scott Nelson-Archer, CLU, ChFC
                      303-953-0263 Direct / [email protected]

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                      • #12
                        I wouldn't buy it in your situation.
                        Helping those who wear the white coat get a fair shake on Wall Street since 2011

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                        • #13
                          Your catastrophic disability worry is legitimate, albeit unlikely. One bad car accident can be life changing. It's worth considering disability because if one becomes disabled, your cost of living may actually go up. The non disabled person may also have a drop in income to care for the other. Something to ponder...

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                          • #14




                            We could definitely both be satisfied with each other’s earnings if either one of us were to become disabled! My biggest concern would be becoming so disabled heaven-forbid that healthcare costs become so high it became a stress on one person’s income? is that a realistic worry? Honestly don’t have a true reason to think it would, just more a concern
                            Click to expand...


                            yes and that concern will not be addressed by life insurance.  we are almost thirty years past you and still have the same concerns.  

                            good luck

                             

                             

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                            • #15
                              Term Life Insurance is cheap. Sure both of you can live with out the other financially - but have you thought about giving your spouse the ability to take time off to grieve? She may not be able to work FT for a little while.

                               

                              It is so cheap I don't know why you wouldn't get a modest policy.

                               

                              RE: disability - if totally disabled the income will need to 1) replace income 2) likely pay for extra medical services and things that insurance won't cover. Untl you're FI, def get enough.

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