Husband''s dumb money moves

[Allisonfaye]

I am wondering if you smart ladies can give me any advice in the husband handling department. DH and I have been married for 7 years and he has 3 whole life (actually I think it is one whole life and 2 universal life policies.) I don''t really know the difference but everything I read, hear, etc. says these are a bad idea. Like my husband, I too was ''sold'' this type of policy in my early 20''s and they were touted as being the only retirement that you would need because they would pay you a boatload of money when you do. I cashed mine in about 10 years ago.

We have other life insurance because the face amount of the policies is not nearly enough so that is not really the issue here. Although since this financial crisis and our net worth has gone way down, we could use a beef up in the term life insurance. Bottom line: I want to cancel the policies. They are costing us a hefty monthly payment. I don''t care if we invest the money monthly or if we just use part of it to buy term, invest the rest, whatever. But I hate making costly, dumb mistakes with our money. Dh is a smart guy but he has trouble admitting this was a mistake so he just won''t consider cashing them in. Any advice on how to get a stubborn man to do something?

 

[neatfreak]

Most financial gurus say everything is a waste of money except for term life if you have dependents. Suze Orman has very easy to read advice in this area if you check out her books.

And I wouldn't frame it as a *mistake*-men hate to think they made mistakes. Instead present this to him as a *new* idea-and make him think it was HIS idea to switch.

 

[Madam Bijoux]

If he wants to keep the life insurance policies, would the company let him change the policies to term life? The difference between them is that when you buy a whole life policy, you pay premiums for your entire life. Term life provides coverage for a limited period of time. Once the term is up, you can either drop the policy or pay annually increasing premiums to continue the coverage. If the insured dies during the term, the death benefit will be paid to the beneficiary.

 

[isaku5]

I agree that men never like to admit to mistakes or even oversights; it''s just a guy thing, I think.

Term life is the only kind of life insurance we own. It''s affordable unless you''re in a situation where every penny counts.

I''d certainly look into the cost and benefits before I cashed in any insurance policy.

One other bit of advice I''d like to offer: Disability insurance is very important. Make sure that both of you have that as a benefit from work. According to statistics I''ve read, you''re four times more likely to be disabled than you are to die.

(No, I''m definitely NOT in the insurance business.

)

 

[Allisonfaye]

Date: 4/21/2009 11:10:15 AM
Author: isaku5
I agree that men never like to admit to mistakes or even oversights; it''s just a guy thing, I think.

Term life is the only kind of life insurance we own. It''s affordable unless you''re in a situation where every penny counts.

I''d certainly look into the cost and benefits before I cashed in any insurance policy.

One other bit of advice I''d like to offer: Disability insurance is very important. Make sure that both of you have that as a benefit from work. According to statistics I''ve read, you''re four times more likely to be disabled than you are to die.

(No, I''m definitely NOT in the insurance business.

)

Just to add a few facts to this story. DH works for a VERY well known insurance company. Secondly, he will NEVER believe it was his idea because he already knows I think he should do it but I haven''t put on a lot of pressure. He hates Suze Orman for this very reason. He is the kind of guy who has to discount everything she says because she disagrees with him on something. lol

Honestly, because our financial position was good, I decided before to leave it alone. But now, we could use that money and I think we need more term insurance. But the rub is that he thinks this will provide income for life when he retires. I need to work from that angle. We are going to meet with a couple of financial advisors soon to pick one that we like and I am afraid they will not back me up on this one. I am thinking of writing a letter to Suze Orman because in all the times I have seen her nix these policies, she doesn''t really address the income for life part. Maybe I should just get a quote on some term. Like I said, we have term already (much cheaper) and we are maxed out on that company''s policy because it is as professional organization but we could still use more.

 

[AGSHF]

Allisonfaye,

I won't go into pros and cons of whole life insurance, but have a quick thought.

Bottom line: you and your husband should have enough term life insurance (cheap compared to whole life) to protect your financial security and lifestyle should anything happen to the main breadwinner who, I understand, is your husband. Most financial advisora suggest at least 5X annual salary (varies of course with level of earnings or other assets) or you can do the math based on what you want to have money for or "paid off" should your husband die: mortgage, college educations, private educations, time for you to re-enter the work force, etc. (I personally vote for the a lifetime of travel, but I don't think DH agrees. : ) ) We would never consider not insuring our houses or cars, so insuring the earning power that provides family security is just as critical. I would suggest looking at fixed-term policies, such as 10-year, 15-year or 20-year policies depending on how many years before your children reach maturity. Get some quotes and go from there.

Here's one online worksheet you can use from Smartmoney.com:

http://www.smartmoney.com/personal-finance/insurance/how-much-life-insurance-do-you-need-12949/#worksheet

If you can get that accomplished first, then it might be clearer that the money going into monthly premiums for whole life insurance is better used elsewhere. And, no, term life insurance policy premiums aren't wasted if your husband lives to a grand old age. They went to protect his family's financial security during the time it was needed.

Good luck on this one.

 

[Allisonfaye]

Date: 4/21/2009 1:20:57 PM
Author: AGSHF
Allisonfaye,

I won''t go into pros and cons of whole life insurance, but have a quick thought.

Bottom line: you and your husband should have enough term life insurance (cheap compared to whole life) to protect your financial security and lifestyle should anything happen to the main breadwinner who, I understand, is your husband. Most financial advisora suggest at least 5X annual salary (varies of course with level of earnings or other assets) or you can do the math based on what you want to have money for or ''paid off'' should your husband die: mortgage, college educations, private educations, time for you to re-enter the work force, etc. (I personally vote for the a lifetime of travel, but I don''t think DH agrees. : ) ) We would never consider not insuring our houses or cars, so insuring the earning power that provides family security is just as critical. I would suggest looking at fixed-term policies, such as 10-year, 15-year or 20-year policies depending on how many years before your children reach maturity. Get some quotes and go from there.

Here''s one online worksheet you can use from Smartmoney.com:

http://www.smartmoney.com/personal-finance/insurance/how-much-life-insurance-do-you-need-12949/#worksheet

If you can get that accomplished first, then it might be clearer that the money going into monthly premiums for whole life insurance is better used elsewhere. And, no, term life insurance policy premiums aren''t wasted if your husband lives to a grand old age. They went to protect his family''s financial security during the time it was needed.

Good luck on this one.

Believe me, as the wife of an insurance exec, I do not believe insurance premiums are wasted. It drives me absolutely crazy that some people believe that if they have paid a car insurance premium for a number of years, as an example, that they somehow are owed something in return and are mad that they didn''t get anything back for it. They DID get something. They transferred the risk to someone else if something happened to their car. And it is for a finite time period, usually 6 months.

Thanks for the tips. I will check out the website.