Who Should Own A Life Insurance Policy? Let"s Take A Look
The question of "who should own a life insurance policy" was asked recently and I thought I should take a few minutes to touch on this subject.
Everyone is aware that the primary income earner in the home or "breadwinner" needs to be covered.
This is a no brainer, but what about everyone else? Let's take a look at the rest of the family.
Whether the breadwinner of the family happens to be mom or dad, the stay at home spouse is not without a significant contribution to the home.
This person normally does the house cleaning, cooking the meals, watching the children, running the errands and much more.
This position is actually more than a full time job.
Think about it for a moment.
The breadwinner gets to clock out a designated time, but the stay at home spouse is on duty until everyone is fed, the dishes are done, the kids have a bath and are put to bed, etc.
What price can you put on this? If you have young children then a nanny would need to be hired.
If you have no children, then perhaps you would be willing to downsize and take care of everything on your own? Do you have things financed jointly? Does the other spouse bring in a second income that helps to pay the bills? These are all questions that must be raised before an answer can be given to the initial question.
I would have to say that no matter what the situation is in any of the above scenarios that this spouse must have at least enough coverage for burial.
If you have children then you would need to provide enough coverage for them to be cared for at least until they're old enough to do so for themselves.
If you have things jointly financed and you would face losing the second income then you would need to provide for that also, including the amount that would be contributed to saving for college for the kids.
You will need to sit down and figure out exactly what you'll be liable for over the next several years and make certain that you're insured for that amount PLUS an additional 20% in case of the unexpected.
Children need burial coverage and nothing more, unless you have a child that you've co-signed on a vehicle or something of that nature.
Since they do not provide income that goes toward running the home then they only require minimal life insurance coverage.
Everyone is aware that the primary income earner in the home or "breadwinner" needs to be covered.
This is a no brainer, but what about everyone else? Let's take a look at the rest of the family.
Whether the breadwinner of the family happens to be mom or dad, the stay at home spouse is not without a significant contribution to the home.
This person normally does the house cleaning, cooking the meals, watching the children, running the errands and much more.
This position is actually more than a full time job.
Think about it for a moment.
The breadwinner gets to clock out a designated time, but the stay at home spouse is on duty until everyone is fed, the dishes are done, the kids have a bath and are put to bed, etc.
What price can you put on this? If you have young children then a nanny would need to be hired.
If you have no children, then perhaps you would be willing to downsize and take care of everything on your own? Do you have things financed jointly? Does the other spouse bring in a second income that helps to pay the bills? These are all questions that must be raised before an answer can be given to the initial question.
I would have to say that no matter what the situation is in any of the above scenarios that this spouse must have at least enough coverage for burial.
If you have children then you would need to provide enough coverage for them to be cared for at least until they're old enough to do so for themselves.
If you have things jointly financed and you would face losing the second income then you would need to provide for that also, including the amount that would be contributed to saving for college for the kids.
You will need to sit down and figure out exactly what you'll be liable for over the next several years and make certain that you're insured for that amount PLUS an additional 20% in case of the unexpected.
Children need burial coverage and nothing more, unless you have a child that you've co-signed on a vehicle or something of that nature.
Since they do not provide income that goes toward running the home then they only require minimal life insurance coverage.
Source...