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Ask Dave

Life Insurance With No Kids?

Dave says the point is to have enough life insurance to replace the income of the deceased spouse.

QUESTION: A listener asks if she and her husband need life insurance since they both work and don’t have kids.

ANSWER: Simply ask yourself, “What will happen if I die?”  That will help you determine how much life insurance you need before you have children.  For example, if you have a bunch of debt that your spouse would be stuck with if you died, then you need a little life insurance.  Even still, a couple with a double income and no children normally will not need much life insurance. 

When you have kids, you need to take out a term-life insurance policy that is 10 times your annual take-home pay.  The point is to have enough money to replace the income of the deceased spouse.

This is even true for stay-at-home moms and dads.  They provide economic benefits by doing the majority of the cooking, cleaning, shuttling the kids, so don’t forget to take out some life insurance on stay-at-home parents.