It goes without saying that Brenda should get more coverage. But don’t overlook Kevin either. Just because he isn’t earning an income doesn’t mean he shouldn’t have insurance. He has flexibility to help out around the house, get the kids off the bus, get the kids off to school in the morning while Brenda sits in traffic on her way to work. Maybe Kevin even helps with homework when they get back from school before Brenda comes home.
Let’s say Kevin dies. Who is going to watch the kids when they get home from school? Who is going to get them ready in the morning? All these activities either cost time, that Brenda doesn’t have because she has to go to work, or money through a child care provider. The costs of child care isn’t cheap by the way.
Given that Brenda and Kevin are squeezed financially right now, how much more squeezed would they be if Kevin died and Brenda had to pay for childcare? Here is a great resource on child care costs for your state. Again, it’s not cheap! (Please be advised I’m not an advocating what the authors of that article suggest. EPI is a VERY liberal think tank. But they do raise a good point on the costs of child care, nonetheless.)
Now just think if Brenda and Kevin had taken the time to actually look into life insurance. They’d realize it’s so cheap they should get policies on their own as opposed to relying solely on Brenda’s employer.
Term Life Insurance is So Cheap No Reason Not To Have It
Let’s say Brenda is 43 years old and is in decent shape. USAA.com quotes a $400,000 term policy with a fixed premium of $35 a month for 20 years(subject to this writing in late 2017). Let’s say Kevin is 47 years old, the same policy would cost $60 a month.
So, for less than $100 a month both Brenda and Kevin would have $400k coverage guaranteed for the next 20 years. If either of them died that coverage would be more than enough to pay off all their debts and have a significant amount of cash left over. All for $100 a month in premiums.