Breadwinners: Do You Have Life Insurance?

If you are a breadwinner for your family, you want to make sure they are financially protected in the event of your death. This means life insurance.

As the primary breadwinner in my home, I feel it's very important that I have life insurance coverage. According to industry organization LIMRA, three in 10 American households are uninsured. If your household is among the uninsured, or if you are among the half of households that could use more insurance, consider now a good time to think about buying coverage.

life insurance coverage

It makes sense to think about what could happen. Consider the following example, provided to me by State Farm:

Stephen Mayhle?of Pittsburgh, Penn., tragically died in the line of duty for The Pittsburgh Bureau of Police in April 2009. Prior to this tragedy, Stephen and his wife Shandra decided to terminate a $50,000 universal life insurance policy to save on expenses since Stephen had group life insurance through the City of Pittsburgh. However, their State Farm agent Chad Gregorini convinced the Mayhles that Stephen needed more coverage, not less. Following Stephen?s passing, the $250,000, 20-year term policy that they purchased, has helped Shandra pay off a car loan, start college funds for their daughters, save for retirement and start paying down the mortgage. Most importantly, Shandra has been able spend time with her daughters without financial stress.

My insurance coverage is adequate to allow my husband to pay off the mortgage, his student loans, and the car loans. On top of that, it would also provide some income replacement and enough money to hire care for my son when he isn't in school.

My husband does have a job as an adjunct professor, so his income was taken into account when we decided how much life insurance coverage to get for me. It's not a ton of coverage, but it's right for us.

What about Non-Breadwinners?

Of course, just because you aren't a breadwinner doesn't mean that your passing wouldn't have financial consequences. Indeed, a non-breadwinning stay at home partner can have a big impact on finances. Who is going to watch the kids, take care of the home, and prepare the meals? Who will run errands?

If a non-breadwinning partner dies, these items will all have to be performed by someone. Either you run yourself ragged trying to keep up with it all, or you hire help. With the right life insurance policy on your non-breadwinning partner, it's possible for you to get the support you need upon his or her passing. This can be a big deal over time.

Choosing Life Insurance Coverage

When you decide what coverage to get, consider your own family's needs. Some of the things to take into consideration include:

  • How much money do you make?
  • How much does your partner make?
  • What debts do you have?
  • How much will a funeral cost?
  • Do you want to pay for other things (such as a child's college education)?
  • What would it cost to replace the at-home chores done by the insured?

Once you have figure out these items, and decided how much life insurance you need, buy a policy from a reputable life insurance company that is likely to be around for awhile.

4 thoughts on “Breadwinners: Do You Have Life Insurance?”

  1. Mike@WeOnlyDoThisOnce

    Yep! There are some awful horror stories out there about lack of life insurance. I wonder if this should be more regulated.

  2. Planning for Long Term Care

    This time around it doesn’t matter if you’re a breadwinner or not when you purchase life insurance because you can repurpose this to a long term care insurance coverage. This is a necessity today because of the longer life expectancy. Purchasing a hybrid product, which is the combination of life insurance and long term care insurance will give you both death benefits and long term care benefits. This is a great alternative to people who will only need limited long term care and also prefers to leave something for his dependents.

    1. Miranda Marquit

      Interesting take. That’s a good strategy if you are concerned about the cost of care later on. Thanks for sharing.

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