Unfairness in divorce

[StephanieZ]

1. Not everyone can access term life insurance for low rates due to medical condition. I have more than one friend who had cancer or significant health issue in their 20s before they had kids.

 

2. A sizable number of American families are subsisting on incomes that are too tight for $80 or even $40 a month. The median household income isn't all that high. If someone already making choices between medicine and food or shoes for the kid and gas for the car, insurance can easily fall right out of the budget.

 

We bought term insurance when we were very young and can thus afford it even on our temporarily tighter income. But if I were shopping for it now, with a 36 year old husband who takes medication compared to when he was 24 and on no medication, the cost would probably be too high. We do also have coverage via my husband's work which is not costly but it's not a ton. Still, if we didn't have a very low rate on term we wouldn't be able to fit in what it would cost now, at least not until my husband graduates from school.

 

1. I get that one. To me, being uninsurable prior to making a family is one acceptable excuse for running the risk of leaving your family without coverage . . . In my personal opinion, this situation, however, does call on the adults to make conservative decisions to mitigate the risk to their families. I.e., each spouse needs to retain an ability to support themselves and their families (keep up education, credentials, contacts) . ..  and also cash savings and minimizing debt need to be immediate constant priorities in order to minimize risk to survivors. 

 

2. IMHO, it is an unacceptable risk not to carry life insurance if you have dependents that can't be OK without your survival. To me, this is a fundamental need that would require the same priority as immediate food/shelter/health. If one is on that tight a budget now, this what would happen to dependents if the wage earner died! So, to me, that means that the adults in the family need to fix this via cut another expense or get more income. Period. Just the same as if you "couldn't afford" food. Find a way. OR, don't have dependents . . . But don't put other people in a position to be dependent on you if you can't do everything possible to protect their survival . . . Get a mail route. Or cut cable. Or get a burner phone instead of a "real" phone. But, no, leaving your survivors destitute isn't a responsible choice, IMHO.

 

Just my priorities, personally. 

[idnib]

1. Not everyone can access term life insurance for low rates due to a prior medical condition. I have more than one friend who had cancer or a significant health issue in their 20s before they had kids and are now expensive to insure or even just plain uninsurable.

 

2. A sizable number of American families are subsisting on incomes that are too tight for $80 or even $40 a month. The median household income isn't all that high. If someone already making choices between medicine and food or shoes for the kid and gas for the car, insurance can easily fall right out of the budget.

 

I agree the first one can be out of someone's control.

 

As for the second, the context of this discussion is of one parent not working, not two parents working and they still cannot afford it. There are, sadly many of those families.  Surely the SAH parent can find something to do which produces $10-$15/week? For the second, not being able to swing $40 or $80/month for life insurance, when I have small children, would mean I didn't get stay home and not produce income. But I freely admit I am paranoid, having seen some really terrible things happen when people died suddenly and had small children and no insurance.

[Bluegoat]

As far as the amount of insurance, I suspect most people don't want or need enough to allow them to be SAH people indefinitely.  But if it is enough to cover the mortgage and debt, for example, it might be enough to live off long enough to retrain, or to work at a lower pay job or part time while staying in the same home.  I would never assume, unless my health became an issue or I was really required as a full-time caregiver, that I wouldn't have to go back to work at all in the case of divorce or death. 

[Scarlett]

1. I get that one. To me, being uninsurable prior to making a family is one acceptable excuse for running the risk of leaving your family without coverage . . . In my personal opinion, this situation, however, does call on the adults to make conservative decisions to mitigate the risk to their families. I.e., each spouse needs to retain an ability to support themselves and their families (keep up education, credentials, contacts) . .. and also cash savings and minimizing debt need to be immediate constant priorities in order to minimize risk to survivors.

 

2. IMHO, it is an unacceptable risk not to carry life insurance if you have dependents that can't be OK without your survival. To me, this is a fundamental need that would require the same priority as immediate food/shelter/health. If one is on that tight a budget now, this what would happen to dependents if the wage earner died! So, to me, that means that the adults in the family need to fix this via cut another expense or get more income. Period. Just the same as if you "couldn't afford" food. Find a way. OR, don't have dependents . . . But don't put other people in a position to be dependent on you if you can't do everything possible to protect their survival . . . Get a mail route. Or cut cable. Or get a burner phone instead of a "real" phone. But, no, leaving your survivors destitute isn't a responsible choice, IMHO.

 

Just my priorities, personally.

Very few people are left destitute when a spouse dies. Social security will pay for minor children. I know my MIL was widowed with 7 kids and she didn't go back to work for 5 years...they were FAR from destitute and they lived on social,security. No life insurance.

 

Standard of living may go down but I don't think most people will be destitute.

[maize]

How is even possible that not many people afford life insurance easily?

 

We are in the process of updating our estate plans, and one of the things we did was take a new 500k 20 year term life policy on my turning-50-this-year-dh. It is under $80/mo. (He has excellent health.) The $1,000,000 20 year term we took out 11 years ago costs about the same since he was just 40 at that time.

 

I'm sorry to be harsh, but it is simply the height of irresponsibility not to have adequate life insurance for your dependents. Work a little more, cut back a little something, but everyone should have life insurance if others depend on them and adequate assets are not yet in place to support them.

 

We took out our first life insurance policies when we had our first baby. Since then, we've reassessed policies (both life and disability) every few years and updated as appropriate. Simple term life insurance cheap as long as you are reasonably healthy and young.

 

Yes, disability insurance is dramatically more expensive (but also dramatically more likely to actually be used). We do have it on dh, and it costs a LOT. I think the new supplemental policies I just got quoted for 4900/mo in coverage are around 250/mo in premiums. Yes, that's way more than life insurance. It is a lot. I can see that some families would really struggle to get disability coverage. Depending on your circumstances, it may or may not be critical or reasonable to pay . . .

 

But, life insurance? That's a no brainer IMHO.

Not everyone has excellent health.

Dh has been turned down for life insurance in the past, and I know others in the same boat. Fortunately he currently has insurance through his employer, but many factors can cause a company to refuse to insure or to insure only with a very high premium.

[Scarlett]

Not everyone has excellent health.

Dh has been turned down for life insurance in the past, and I know others in the same boat. Fortunately he currently has insurance through his employer, but many factors can cause a company to refuse to insure or to insure only with a very high premium.

Oh boy is that the truth! I went to renew my life insurance last spring....one of the questions was do you have an doc appts scheduled. Why yes I do, my ultrasound. Ok they wanted to wait for those results. Naturally I get a stupid call,back over NOTHING.....and so insurance declines to issue new policy until my 6 month follow up. After that time period they wanted to know if I had had any doc appts in between. Yes my regular gyno visit. They wanted those results. I took forever to get a policy issued and when they did I got the super preferred rate! So weird. Also I kept paying the VERY high premium form6 months to keep the policy I had just in case....and they did reimburse me a good portion of that high premium when the new policy was finally issued.

 

I can tell you though it was a ridiculous process...and I know many would have given up. I made sure to not make any appts or go to any doctor while I was waiting for the 6 months be up...I figured they could keep dealing endlessly if I wasn't careful.

[StephanieZ]

I have life insurance, but do you really think 500k is really enough?

I live in a high COL area. My extended family is here. A 500k policy would not be enough to stay without a lot of help.

 

Additionally, we didn't have children until we were older. Policies get more expensive the older you are.

 

Another thing that 20 year term you bought when your oldest was born will run out before your youngest is out of high school or even middle school. By then you will be in you may be in your fifties and more expensive to insure.

 

When you purchase insurance, what are your goals. Is it to pay off the home? Pay for college? Get spouse training for a new career? What are you factoring in.

 

We have policies on each of us. They were purchased before our youngest was born. I wouldn't want to uproot the DC to go to a low COL area where we have no family support. Our youngest has disabilities. Dh is closer to 60 than 50. So, honestly I put all the factors together. There's enough if one of us dies before the term runs out for the other to get things covered without being homeless. But there are a whole lot of things there.

 

It is easy to say it's irresponsible not to have life insurance, but what amount do you need to have to be responsible.

 

The other factor is some people are uninsurable due to preexisting health issues. If my spouse were in that situation, I would have continued working in a more lucrative field. But some people don't make that choice.

 

Is it irresponsible not to have disability insurance, as well.

 

I agree that 500k is not sufficient insurance for every family. You need to consider a LOT of factors. Our coverage for dh has ranged from 250k 19 years ago to about 1.75 million now, and will be down to 750k when dh is 58 years old, by which time we'll have a lot of assets/retirement savings in place and only maybe a year or two of college left for one child. 500k would not be nearly enough for us today, but for when dh is ages 65-70, it'd be totally fine for us.  

 

I personally agree that disability insurance is vital if at all possible. It is harder to qualify for and much more complicated to select and expensive to pay for, so I can understand why not all families can figure it out and/or justify the expense. But, personally, we've always had it on dh. 

[FaithManor]

Very few people are left destitute when a spouse dies. Social security will pay for minor children. I know my MIL was widowed with 7 kids and she didn't go back to work for 5 years...they were FAR from destitute and they lived on social,security. No life insurance.

 

Standard of living may go down but I don't think most people will be destitute.

The pay out per month per child is based on the amount paid in though so if the earning spouse was low or low to middle income, the amount can be low enough that the widow/er cannot survive with the children and remain out of the workforce. In our state, the maximum number of years he/she could receive public assistance is four years, and the amount of assistance is quite low due to budget cuts so close to destitute is deinitely a possibility. As was the case of a former piano student, her mother had to find work immediately since her father's term policy was only $75000 which just barely covered the balance on the mortgage. She and her sibling each received $350 each for SS survivor benefits. Her mother had no job skills so things were pretty lean and at times quite scary.

 

This is why I think it is so important to try to keep some skills current, keep up contacts for references, do volunteer work that shows something a future employer would find attractive, etc. I have seen too many really dire situations.

[madteaparty]

My brother's wife does not wish to work. She said so herself many times before and after marriage. She also doesn't spend much so my brother's just above poverty level income is okay for them.

 

Hubby and I married in our home country where both of us are citizens there. Our divorce laws are different. SAHMs have decent protection there and can be SAHMs for life after divorce.

 

The legal age for our kids is also 21 under our home country and child support is extended past 21 if the child is serving compulsory militrary service or if the child is a full time student in a tertiary institution. If a child is working when he turns 21, child support stops.

 

Divorce laws for my home country quoted below

 

"The Court when ordering maintenance for a wife shall have regard to all the circumstances of the case including the following matters:

 

The financial needs of the wife;

 

The income, earning capacity, property and other financial resources of the wife;

 

Any physical or mental disability of the wife;

The age of each party to the marriage and the duration of the marriage;

 

The contribution made by each of the parties to the marriage, to the welfare of the family, including any contribution made by looking after the home or caring for the family;

 

The standard of living enjoyed by the wife before the husband neglected or refused to provide reasonable maintenance for the wife;

 

The conduct of each of the parties to the marriage.

 

Such a Maintenance Order if granted will only expire on the death of the wife or the husband or upon the remarriage of the wife, as the case may be."

 

ETA:

Once a marriage is longer than 10 years, the standard of living takes precedence. So a wife used to a chef and chauffeur would get to have one after divorce paid by the ex-husband. Kids expensive activities would be included in child support.

Fwiw, one can be sued for divorce in the county one lives in now, so where you got married is irrelevant. Even different counties/courts within the same state vary on how they apply state law (a divorce in NYC looks very different than one upstate, say).

[Scarlett]

The pay out per month per child is based on the amount paid in though so if the earning spouse was low or low to middle income, the amount can be low enough that the widow/er cannot survive with the children and remain out of the workforce. In our state, the maximum number of years he/she could receive public assistance is four years, and the amount of assistance is quite low due to budget cuts so close to destitute is deinitely a possibility. As was the case of a former piano student, her mother had to find work immediately since her father's term policy was only $75000 which just barely covered the balance on the mortgage. She and her sibling each received $350 each for SS survivor benefits. Her mother had no job skills so things were pretty lean and at times quite scary.

 

This is why I think it is so important to try to keep some skills current, keep up contacts for references, do volunteer work that shows something a future employer would find attractive, etc. I have seen too many really dire situations.

http://financialducksinarow.com/9450/8-questions-social-security-survivor-benefits/

 

That doesn't really make sense. Each dependent (including sah parent) gets 75% of what the decedent would have got at full retirement age. If those kids were getting $350 that means their father would have only received 466 at his full retirement age? Still it would be $350 times 3 and with a paid for home I dont consider that destitute.

Edited January 27, 2016 by Scarlett

[Scarlett]

I agree that 500k is not sufficient insurance for every family. You need to consider a LOT of factors. Our coverage for dh has ranged from 250k 19 years ago to about 1.75 million now, and will be down to 750k when dh is 58 years old, by which time we'll have a lot of assets/retirement savings in place and only maybe a year or two of college left for one child. 500k would not be nearly enough for us today, but for when dh is ages 65-70, it'd be totally fine for us.

 

I personally agree that disability insurance is vital if at all possible. It is harder to qualify for and much more complicated to select and expensive to pay for, so I can understand why not all families can figure it out and/or justify the expense. But, personally, we've always had it on dh.

I think your definition of providing for ones children is wildly different than mine!

[madteaparty]

I agree that 500k is not sufficient insurance for every family. You need to consider a LOT of factors. Our coverage for dh has ranged from 250k 19 years ago to about 1.75 million now, and will be down to 750k when dh is 58 years old, by which time we'll have a lot of assets/retirement savings in place and only maybe a year or two of college left for one child. 500k would not be nearly enough for us today, but for when dh is ages 65-70, it'd be totally fine for us.

 

I personally agree that disability insurance is vital if at all possible. It is harder to qualify for and much more complicated to select and expensive to pay for, so I can understand why not all families can figure it out and/or justify the expense. But, personally, we've always had it on dh.

I have thought about long term disability for a long time, and every year at open enrollment, and i just can't justify it. It feels even more than a racket than car insurance, but the later is required by law. Unlike most life insurance, it is very expensive. In any event, we have the basic that my DH's employer offers and I joke that me being able to go to work is our current disability insurance.

[arnold]

 

 

That doesn't really make sense. Each dependent (including sah parent) gets 75% of what the decedent would have got at full retirement age. If those kids were getting $350 that means their father would have only received 466 at his full retirement age? Still it would be $350 times 3 and with a paid for home I dont consider that destitute.

 

$1050 wouldn't even cover our groceries for the month!

[EmseB]

That doesn't really make sense. Each dependent (including sah parent) gets 75% of what the decedent would have got at full retirement age. If those kids were getting $350 that means their father would have only received 466 at his full retirement age? Still it would be $350 times 3 and with a paid for home I dont consider that destitute.

 

$1050 wouldn't even cover our groceries for the month!

 

I don't know if this makes it more clear (from the website):

 

Within a family, a child may receive up

to one-half of the parent’s full retirement or

disability benefit, or 75 percent of the deceased

parent’s basic Social Security benefit. However,

there is a limit to the amount of money that

can be paid to a family. The family maximum

payment is determined as part of every Social

Security benefit computation and can be

from 150 to 180 percent of the parent’s full

benefit amount. If the total amount payable to

all family members exceeds this limit, each

person’s benefit is reduced proportionately

(except the parent’s) until the total equals the

maximum allowable amount.

 

[Scarlett]

 

That doesn't really make sense. Each dependent (including sah parent) gets 75% of what the decedent would have got at full retirement age. If those kids were getting $350 that means their father would have only received 466 at his full retirement age? Still it would be $350 times 3 and with a paid for home I dont consider that destitute.

 

$1050 wouldn't even cover our groceries for the month!

 

Well I imagine it would cover groceries for a mom and two kids. But there is still a paid for home and a mom who can go back to work. I am not saying it is easy but I don't see that situation as destitute ...and I can't really believe each dependent only gets $350 anyways.

[goldberry]

The benefits depend on what the working person put it.  When my MIL remarried, her husband was self-employed and basically took everything under the table to avoid paying taxes.  He would have gotten about $750 a month I think?  So she is getting not very much.

 

My FIL was self employed his whole life, but spent a lot of that time caring for an elderly relative in exchange for room and board.  No reportable income really.  Same boat, he gets about $600 per month.

[Scarlett]

The benefits depend on what the working person put it. When my MIL remarried, her husband was self-employed and basically took everything under the table to avoid paying taxes. He would have gotten about $750 a month I think? So she is getting not very much.

 

My FIL was self employed his whole life, but spent a lot of that time caring for an elderly relative in exchange for room and board. No reportable income really. Same boat, he gets about $600 per month.

My understanding is that $600 is the minimum.....so I would assume that is per dependent when there are minor children.

 

I don't know.....I hear all of,these horror stories....but in real life I know people like my brother...he never made a lot of money...yet he gets 900 for himself and another 500 each for his minor child and his wife.....and I am not saying that is a lot to live on....but they are not destitute.

[arnold]

 

$1050 wouldn't even cover our groceries for the month!

 

Well I imagine it would cover groceries for a mom and two kids. But there is still a paid for home and a mom who can go back to work. I am not saying it is easy but I don't see that situation as destitute ...and I can't really believe each dependent only gets $350 anyways.

 

Our mortgage/property taxes is about 22 percent of my dh's income, so even with a paid off mortgage, I still need to cover the other 78 percent of monthly expenses; and no we don't live a life of luxury. We live pay check to pay check, and the only debt we have is our mortgage and a car payment.

[StephanieZ]

Very few people are left destitute when a spouse dies. Social security will pay for minor children. I know my MIL was widowed with 7 kids and she didn't go back to work for 5 years...they were FAR from destitute and they lived on social,security. No life insurance.

 

Standard of living may go down but I don't think most people will be destitute.

 

Well, I know expectations vary, but I would have considered us destitute if dh had died and left us only with SSI. We could not have survived in anything close to our current lifestyle (or our then-current lifestyle) with SSI. We lived in high COL areas, we had large mortgages/educational/business debts, and we are used to living large. 

 

Of course, we would not have starved or been actually homeless. But, the music lessons, the homeschooling, the travel, the ability to fund college, the ability to one day retire comfortably . . . those things would not be possible relying on government benefits. 

 

Obviously, what is destitute to *me* isn't destitute to a family living comfortable and debt-free on 30k/yr and what is destitute to that family isn't destitute to a family living on food stamps or another family in the developing world. I think it is just important for people to take the time to realistically evaluate what would happen to their loved ones if they died or were disabled, and to plan accordingly. 

[Murphy101]

I think being a stay at home parent should be treated like a job.

 

Having a sahp is tremendously beneficial to the working parent. There is no way many of them would be able to garner the same earning/jobs without one. I know for a fact my dh would have never been able to even hold some of his jobs if he hadn't had a sahp. Many of his coworkers were prime examples. Single/divorced meant they had to rely on daycare. You know who doesn't watch your kids overtime at the drop of the hat so you can impress your boss? Daycares. You know who you cannot just assume will watch your kids weekends and nights? Day cares. You know who doesn't watch your kids when they are sick and you can't call in to work? Daycare. You know who doesn't change their bus schedule to work with your work schedule? Any school system.

 

I don't care if it is mom or dad, if either choose to help the family by staying home, I think it should be viewed with at least as much respect as a daycare job, unpaid though it is.

 

In fact, I think anyone who qualifies for assisted daycare funding should get it whether they pay for daycare or watch their own kids.

 

As for a backup plan...

 

I don't have one.

 

I stay home because it is the best thing for my kids and my husband. If, God forbid, my dh were to die or divorce me, I'd be screwed. Yep. Totally. But that wouldn't change the benefit of it prior to that.

 

I am positive I wouldn't divorce dh. Because the whole Catholic issue, but even more than that bc I can't think of anything that would induce me to risk my future or my kids futures being determined by courts notorious for their inability to have any common sense or justice.

[Zinnia]

Very few people are left destitute when a spouse dies. Social security will pay for minor children. I know my MIL was widowed with 7 kids and she didn't go back to work for 5 years...they were FAR from destitute and they lived on social,security. No life insurance.

 

Standard of living may go down but I don't think most people will be destitute.

 

A friend of mine was divorced with 3 small children (twin newborns and a 3 year old).  She was in that spot where income hardly covered childcare, and so she had this elaborate system of survival--babysitting with kids in tow, trading childcare, odd jobs, the whole nine yards.  Her ex was not reliable about child support but would occasionally contribute.

 

Her ex-h died, and she now gets SSI for the kids.  She's able to relax so much about money.  Although it's, of course, terribly sad for the kids, in the terms of their day to day life, things have improved a whole lot.

[FaithManor]

$1050 wouldn't even cover our groceries for the month!

 

Well I imagine it would cover groceries for a mom and two kids. But there is still a paid for home and a mom who can go back to work. I am not saying it is easy but I don't see that situation as destitute ...and I can't really believe each dependent only gets $350 anyways.

Scarlett, it depends on how much the deceased parent was earning, and how many years he/she paid. The "full amount at retirement" goes up each year you pay into the system, so if one dies fairly young and not making say above the median income at the time of death, then the pay out is based on that pay even though likely that individual would have see salary increases throughout life.

 

It really is that low for my friend.

[Laura Corin]

If I were a lone parent (for whatever reason) with one child under and one child over five, with no savings or income, I would be due £334 (about USD500) a week in benefits, including payment of the interest on my (reasonably low-cost) mortgage.  Once my youngest turned five (school age), I would retain some benefits but would be expected to start to look for work.  Child maintenance payments from an ex would not reduce the benefits paid.

 

If I worked a minimum wage job for thirty hours a week and paid for after school child care, I would have an extra £75 a week - benefits would not stop, in order to encourage me to work.

Edited January 27, 2016 by Laura Corin

[Scarlett]

A friend of mine was divorced with 3 small children (twin newborns and a 3 year old). She was in that spot where income hardly covered childcare, and so she had this elaborate system of survival--babysitting with kids in tow, trading childcare, odd jobs, the whole nine yards. Her ex was not reliable about child support but would occasionally contribute.

 

Her ex-h died, and she now gets SSI for the kids. She's able to relax so much about money. Although it's, of course, terribly sad for the kids, in the terms of their day to day life, things have improved a whole lot.

Yes. This is what I am saying.

[Scarlett]

Scarlett, it depends on how much the deceased parent was earning, and how many years he/she paid. The "full amount at retirement" goes up each year you pay into the system, so if one dies fairly young and not making say above the median income at the time of death, then the pay out is based on that pay even though likely that individual would have see salary increases throughout life.

 

It really is that low for my friend.

Well I do realize all of that but it still seems like there is a minimum that is above $350. Clearly I don't know all the ins and outs of social security law.

[Murphy101]

From the other perspective. Dh is taking a huge chance on my being a sahm/home schooling. I've had zero income for over 15 years. That means very little SSI if I die for him and the kids. He would be way more screwed than me if I died or ditched him with the kids.

[Scarlett]

Well, I know expectations vary, but I would have considered us destitute if dh had died and left us only with SSI. We could not have survived in anything close to our current lifestyle (or our then-current lifestyle) with SSI. We lived in high COL areas, we had large mortgages/educational/business debts, and we are used to living large. 

 

Of course, we would not have starved or been actually homeless. But, the music lessons, the homeschooling, the travel, the ability to fund college, the ability to one day retire comfortably . . . those things would not be possible relying on government benefits. 

 

Obviously, what is destitute to *me* isn't destitute to a family living comfortable and debt-free on 30k/yr and what is destitute to that family isn't destitute to a family living on food stamps or another family in the developing world. I think it is just important for people to take the time to realistically evaluate what would happen to their loved ones if they died or were disabled, and to plan accordingly. 

 

 

I agree there should be a plan.  But 500K seems like  A LOT of life insurance to me.  If it is what you feel you need and you can afford it that is great.  I just hate for young struggling families to feel terrified if they don't have the same amount.  

[maize]

My understanding is that $600 is the minimum.....so I would assume that is per dependent when there are minor children.

 

I don't know.....I hear all of,these horror stories....but in real life I know people like my brother...he never made a lot of money...yet he gets 900 for himself and another 500 each for his minor child and his wife.....and I am not saying that is a lot to live on....but they are not destitute.

Is your brother on disability? The rules for that are different than for survivor benefits.

[Scarlett]

From the other perspective. Dh is taking a huge chance on my being a sahm/home schooling. I've had zero income for over 15 years. That means very little SSI if I die for him and the kids. He would be way more screwed than me if I died or ditched him with the kids.

 

 

QFT.  

[maize]

From the other perspective. Dh is taking a huge chance on my being a sahm/home schooling. I've had zero income for over 15 years. That means very little SSI if I die for him and the kids. He would be way more screwed than me if I died or ditched him with the kids.

Do you have life insurance on yourself?

 

One difference is that your husband has had all these years to build his own work experience and earning potential; you have not.

[Scarlett]

Is your brother on disability? The rules for that are different than for survivor benefits.

 

 

Yes he is on disability....and I know the rules are different but I actually think survivors get more if the parent dies.  I really don't know.  No body listen to me.

 

:)

[Murphy101]

QFT.

I have no idea what that means.

[Laura Corin]

From the other perspective. Dh is taking a huge chance on my being a sahm/home schooling. I've had zero income for over 15 years. That means very little SSI if I die for him and the kids. He would be way more screwed than me if I died or ditched him with the kids.

 

Is there no way of making voluntary contributions to SSI?  I made voluntary contributions when my income was too low for them to happen automatically.

 

Here the pension contributions for one parent are paid by the state until the youngest child is 12; other benefits that I listed above are non-contributory.

[Scarlett]

I have no idea what that means.

 

 

Quoted for Truth.  

 

LOL...sorry.  I am a nerd.

[EmseB]

I agree there should be a plan.  But 500K seems like  A LOT of life insurance to me.  If it is what you feel you need and you can afford it that is great.  I just hate for young struggling families to feel terrified if they don't have the same amount.  

 

500K is a lot of money until you look at what your spouse would bring in for their working years for the rest of your life.  Even in a low COL area, 500K would not enable me to stay at home with my kids until the youngest is grown.  Maybe that wouldn't be the goal of most life insurance policies, but I know for a fact that my DH wouldn't want me to put the kids in daycare and public school if he died.  In order to make homeschooling/etc happen long term, large amounts of life insurance are needed, even with SSI.

 

I know we all have different perspectives, but as a mom with 4 young kids and no work history for the past 10 years, 500k does not seem like a lot of insurance for the rest of their growing up years.

[Scarlett]

500K is a lot of money until you look at what your spouse would bring in for their working years for the rest of your life.  Even in a low COL area, 500K would not enable me to stay at home with my kids until the youngest is grown.  Maybe that wouldn't be the goal of most life insurance policies, but I know for a fact that my DH wouldn't want me to put the kids in daycare and public school if he died.  In order to make homeschooling/etc happen long term, large amounts of life insurance are needed, even with SSI.

 

I know we all have different perspectives, but as a mom with 4 young kids and no work history for the past 10 years, 500k does not seem like a lot of insurance for the rest of their growing up years.

 

 

16 years until your youngest is grown.  That is 31250 per year.  Add in the ss you would get...you really think you couldn't live on that?  

 

I am positive I could.  Not a doubt in my mind.  

[Murphy101]

Do you have life insurance on yourself?

 

One difference is that your husband has had all these years to build his own work experience and earning potential; you have not.

Neither of us have any insurance, not life or health.

 

His work experience and income is not even slightly going to offset the expenses of paying someone to do everything that I do. Even if he put the kids in school. He would basicly have to accept being unemployed the day I died or left him, presuming he had any desire at all to parent his kids. His jobs for the majority of our marriage have required extensive travel and the presumption that he doesn't have to worry about his family at work. Eventually, one would hope he would be able to maybe attain a new career but even so, he'd be entering it from the start gate and thus have very low income.

[Guest]

How is even possible that not many people afford life insurance easily?

 

We are in the process of updating our estate plans, and one of the things we did was take a new 500k 20 year term life policy on my turning-50-this-year-dh. It is under $80/mo. (He has excellent health.) The $1,000,000 20 year term we took out 11 years ago costs about the same since he was just 40 at that time.

 

I'm sorry to be harsh, but it is simply the height of irresponsibility not to have adequate life insurance for your dependents. Work a little more, cut back a little something, but everyone should have life insurance if others depend on them and adequate assets are not yet in place to support them.

 

We took out our first life insurance policies when we had our first baby. Since then, we've reassessed policies (both life and disability) every few years and updated as appropriate. Simple term life insurance cheap as long as you are reasonably healthy and young.

 

Yes, disability insurance is dramatically more expensive (but also dramatically more likely to actually be used). We do have it on dh, and it costs a LOT. I think the new supplemental policies I just got quoted for 4900/mo in coverage are around 250/mo in premiums. Yes, that's way more than life insurance. It is a lot. I can see that some families would really struggle to get disability coverage. Depending on your circumstances, it may or may not be critical or reasonable to pay . . .

 

But, life insurance? That's a no brainer IMHO.

Agreed. The cost of life insurance for DH was a factor we priced in when deciding I would stay home, along with what disability provisions we had in place and what secondary and tertiary skills we could utilize if he lost his main job or ended up disabled. I went back to college to help with this too but it's proving to be less helpful than we hoped in the short term. And it turns out his employer will pay full salary for two years of disability and 50% salary for another two years. Which is excellent.

 

Life insurance is a no brainer. We have personal policies for him and me, a secondary policy through the NRA, and a tertiary policy through his employer. Among them he is covered for something like 1.4 million through age 55 and we are still only paying maybe $125 a month for the first two (the policy through his employer is covered in his benefits package).

 

With a single income and only one person bring capable of earning anywhere near a livable salary for our dependents having a plan is crucial. We also structured our assets in case of divorce where I wouldn't be left with nothing. We nearly own our house outright and are co-owners in equal part. We both have excellent personal credit. We both have an equal stake in our very healthy retirement. He would be paying alimony for years and years if it came to it.

 

We hope nothing happens - either injury/death OR divorce. But we have tried to be smart in structuring our finances to account for both in a way that doesn't leave me and the kids homeless if we lose our primary breadwinner somehow.

Edited January 27, 2016 by Arctic Mama

[LucyStoner]

1. I get that one. To me, being uninsurable prior to making a family is one acceptable excuse for running the risk of leaving your family without coverage . . . In my personal opinion, this situation, however, does call on the adults to make conservative decisions to mitigate the risk to their families. I.e., each spouse needs to retain an ability to support themselves and their families (keep up education, credentials, contacts) . .. and also cash savings and minimizing debt need to be immediate constant priorities in order to minimize risk to survivors.

 

2. IMHO, it is an unacceptable risk not to carry life insurance if you have dependents that can't be OK without your survival. To me, this is a fundamental need that would require the same priority as immediate food/shelter/health. If one is on that tight a budget now, this what would happen to dependents if the wage earner died! So, to me, that means that the adults in the family need to fix this via cut another expense or get more income. Period. Just the same as if you "couldn't afford" food. Find a way. OR, don't have dependents . . . But don't put other people in a position to be dependent on you if you can't do everything possible to protect their survival . . . Get a mail route. Or cut cable. Or get a burner phone instead of a "real" phone. But, no, leaving your survivors destitute isn't a responsible choice, IMHO.

 

Just my priorities, personally.

 

 

 

I agree the first one can be out of someone's control.

 

As for the second, the context of this discussion is of one parent not working, not two parents working and they still cannot afford it. There are, sadly many of those families. Surely the SAH parent can find something to do which produces $10-$15/week? For the second, not being able to swing $40 or $80/month for life insurance, when I have small children, would mean I didn't get stay home and not produce income. But I freely admit I am paranoid, having seen some really terrible things happen when people died suddenly and had small children and no insurance.

I know people, and not just a few, who are living barebones, with one parent working 2 jobs or each working opposite shifts, for whom it is just not that simple. They have already cut the frills and $80 a month is food out of their kids' stomaches and they are already bringing in extra money for medicine and shoes and eyeglasses.

 

While it is nice to say "plan" and "don't have dependents if you can afford insurance", the cold hard truth is that people's financial situations can change rapidly for unforeseeable reasons and that 3/4 of all pregnancies are unplanned. When we had our son for instance, I had not one single hint that meeting his health and educational needs would mean I would be out of the workforce for years at this juncture. The plan was kids in school and 2 working parents with the double income that brings.

 

I'm a planner with a serious, nearly pathological, dread of financial instability so I really do get your rather strident views on this. Absolutely. There are definitely many people who could buy insurance but just do not. Still. I was too poor as a child and have worked too closely with people who are financially struggling (helping with budgets, preparing tax returns, administering emergency charitable aid to families in need etc) to not see that it's just not always so simple as we would like it to be. Life is messy and complicated. The best laid plans and all that.

Edited January 27, 2016 by LucyStoner

[EmseB]

16 years until your youngest is grown.  That is 31250 per year.  Add in the ss you would get...you really think you couldn't live on that?  

 

I am positive I could.  Not a doubt in my mind.  

 

Yes, we could live on it.  However, I've done the math and I would really want more of a cushion than that would provide.  Perhaps I'm spoiled (heck, I know I'm spoiled right now not having to work outside the home), but I feel like at some point with health care, taxes, utilities, mortgage/rent, groceries, gas, clothing, automotive stuff...and all the stuff I'm forgetting...any kind of relief I might need as a single mom of four...I do not see that $31250 stretching very far.  Per month that would not cover our rent right now because we're in a high COL area.  I would move, probably in the case that I needed to to get that cost down, but I also have to think of my in-laws, my parents aging, etc.

 

I should add that due to our current status we have no home equity at all.

Edited January 27, 2016 by JodiSue

[Scarlett]

I know people, and not just a few, who are living barebones, with one parent working 2 jobs or each working opposite shifts, for whom it is just not that simple. They have already cut the frills and $80 a month is food out of their kids' stomaches and they are already bringing in extra money for medicine and shoes and eyeglasses.

 

While it is nice to say "plan" and "don't have dependents if you can afford insurance", the cold hard truth is that people's financial situations can change rapidly for unforeseeable reasons and that 3/4 of all pregnancies are unplanned. When we had our son for instance, I had not one single hint that meeting his health and educational needs would mean I would be out of the workforce for years at this juncture. The plan was kids in school and 2 working parents with the double income that brings.

 

I'm a planner with a serious, nearly pathological, dread of financial instability so I really do get your rather strident views on this. Absolutely. There are definitely many people who could buy insurance but just do not. Still. I was too poor as a child and have worked too closely with people who are financially struggling (helping with budgets, preparing tax returns, administering emergency charitable aid to families in need etc) to not see that it's just not always so simple as we would like it to be. Life is messy and complicated. The best laid plans and all that.

 

 

Liking this was not enough.  This times 10.

[Guest]

I agree the first one can be out of someone's control.

 

As for the second, the context of this discussion is of one parent not working, not two parents working and they still cannot afford it. There are, sadly many of those families. Surely the SAH parent can find something to do which produces $10-$15/week? For the second, not being able to swing $40 or $80/month for life insurance, when I have small children, would mean I didn't get stay home and not produce income. But I freely admit I am paranoid, having seen some really terrible things happen when people died suddenly and had small children and no insurance.

I've seen it. And in fact this family carried no medical insurance, being lower middle class farmers, and the husband ended up injured and in the hospital in a coma for several months before dying. The hospital excused the bills PTL, which were in the multiple millions, but they were still left with nothing to fall back on. Our church and his family helped her and the kids to get by until she found decent employment but it was horrendously lonely and difficult for her and the children.

 

We were already prepared when that happened, but it just drove the point home. Our insurance agent has also told me many stories of families who have come to him after a death begging for help and he cannot do anything because they didn't have a policy in place prior to the death. His own sister died and left three small children, very unexpectedly after a car accident, and her husband had to collect her policy to get by - he tells all of us how grateful they were that they didn't *just* insure his brother in law, because replacing a SAHM takes time AND money to when you consider the cost of daycare or after school programs, meals, activities and transit time, etc.

[LucyStoner]

If I were a lone parent (for whatever reason) with one child under and one child over five, with no savings or income, I would be due £334 (about USD500) a week in benefits, including payment of the interest on my (reasonably low-cost) mortgage. Once my youngest turned five (school age), I would retain some benefits but would be expected to start to look for work. Child maintenance payments from an ex would not reduce the benefits paid.

 

If I worked a minimum wage job for thirty hours a week and paid for after school child care, I would have an extra £75 a week - benefits would not stop, in order to encourage me to work.

Here, the cash benefits for a parent and two kids who aren't eligible for disability is roughly $700 a month, plus some food stamps, medical insurance not every doctor takes and, if the family is lucky and after a generally long wait, some sort of subsidized housing that will cost up to 1/3 of that $700. Child support, small wages from pt work and even gifts from family and friends could reduce or even fully eliminate that $700ish payment.

 

I wish I were joking. It is truly that dire for here. It's a bit better if one qualifies for social security after the death of a spouse or for social security disability.

[Laura Corin]

Here, the cash benefits for a parent and two kids who aren't eligible for disability is roughly $700 a month, plus some food stamps, medical insurance not every doctor takes and, if the family is lucky and after a generally long wait, some sort of subsidized housing that will cost up to 1/3 of that $700. Child support, small wages from pt work and even gifts from family and friends could reduce or even fully eliminate that $700ish payment.

 

I wish I were joking. It is truly that dire for here. It's a bit better if one qualifies for social security after the death of a spouse or for social security disability.

 

That stinks.  I can get all Daily Mail about people who don't bother to work, but in fact I'm really glad we have the system we do.

[LucyStoner]

That stinks. I can get all Daily Mail about people who don't bother to work, but in fact I'm really glad we have the system we do.

The system here creates a dynamic where it all but is a fulltime job to be on welfare. You don't recieve enough to pay rent so you spend months and or years getting housing. That takes many visits to different places filling out applications and calls and waiting. You don't recieve enough to pay for heat, so you spend time every season waiting in line for an appointment to get energy assistance. You don't recieve enough food stamps to feed everyone for the whole month so you spend hours waiting in line for food bank food. You work under the table to buy your kids school supplies and clothes and someone finds out about it and they reduce your check. And so on and so forth for every.little.need. People then don't have the frigging mental energy left to find a real way out. The education options open to people on cash assistance often don't even lead to jobs that pay enough to get off assistance. The charitable industrial complex is real.

 

There's also the very real dilemma of if working or working more hours or saving money is going to cost someone money or hurt one's family if it causes a loss of housing, medical or other benefits. It's complex. I wish we had a system more like yours, where people can work and not fear their disabled child will lose their darn health benefits.

Edited January 27, 2016 by LucyStoner

[madteaparty]

That stinks.  I can get all Daily Mail about people who don't bother to work, but in fact I'm really glad we have the system we do.

 The particular brand of capitalism we have chosen here in America is quite harsh. I think most families are one medical issue away from disaster. Or you have families with two parents working full time, with advanced degrees each, with multiple children in childcare that can barely make ends meet. 

[Murphy101]

The system here creates a dynamic where it all but is a fulltime job to be on welfare. You don't recieve enough to pay rent so you spend months and or years getting housing. That takes many visits to different places filling out applications and calls and waiting. You don't recieve enough to pay for heat, so you spend time every season waiting in line for an appointment to get energy assistance. You don't recieve enough food stamps to feed everyone for the whole month so you spend hours waiting in line for food bank food. You work under the table to buy your kids school supplies and clothes and someone finds out about it and they reduce your check. And so on and so forth for every.little.need. People then don't have the frigging mental energy left to find a real way out. The education options open to people on cash assistance often don't even lead to jobs that pay enough to get off assistance. The charitable industrial complex is real.

 

There's also the very real dilemma of if working or working more hours or saving money going to cost someone money or hurt one's family if it causes a loss of housing, medical or other benefits. It's complex. I wish we had a system more like yours, where people can work and not fear their disabled child will lose their darn health benefits.

QFT (thanks Scarlett!)

[Murphy101]

The particular brand of capitalism we have chosen here in America is quite harsh. I think most families are one medical issue away from disaster. Or you have families with two parents working full time, with advanced degrees each, with multiple children in childcare that can barely make ends meet.

Extreme capitalism is just another form of tyranny. Corporate tyranny is just as heartless and bad for society as any other tyranny.

[Arcadia]

Fwiw, one can be sued for divorce in the county one lives in now, so where you got married is irrelevant.

I can also counter sue in my home country which means he will have a hard time renewing his passport and also going home to visit parents and grandparents. We are not holding US citizenship.

[Alicia64]

I don't see this as a divorce issue. Layoffs, Disability and death cause severe financial hardship as well. I think it's important to have skills, continue to update yourself. This is true for both working and no working spouses. Working spouses because some jobs become obsolete. there are many ways to fo this.

 

 

 

The difference between divorce and death: we can have well funded life insurance plans. We had two young women die in our extended family leaving a total of seven kids under ten. Dh and I went out and got mondo life insurance. We took out a little less on him because he works f/t.

 

If he dies there will be enough money so that I wouldn't have to panic.

 

But agreed: disability is scary. They say we should get that kind of insurance too, but how can anyone afford life, disability, and senior care insurance.

 

Maintaining skills/credentials etc. is key.

 

Alley