My SO and I are expecting our first child in a couple of months. We're starting the kid thing later in life, so we already have a NW of $2mil, no debt, and live in a MCOL area. Baby checklists say we should think about term life insurance, but if one (or both) of us were to pass, we talked about it, and each of us think we should be fine without an additional insurance policy. (We also have group life of $200k+ through employers.) Would you/wouldn't you pay for term life in our situation?

likeuplifting
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Term insurance is cheap. If something happened to one of you, it would give you the opportunity to take a year or two off to just concentrate on your child. It would also allow you to hire Services to help you in the home. A $1 million policy will cost you less than $1000 a year for a 20 year term. That is pretty inexpensive insurance. Remember that you need to have a will and trust documents now too. Congratulations on starting a family.

likesmart

This is the best answer thus far. Sure you have a lot of $, that is great, well done. Term life is pretty inexpensive, it doesn’t matter how much else you have; it’s called insurance for a reason, whichever surviving spouse/child is left in case of the worst, they will be super grateful to have it

likehelpful

If you feel you don't need term life insurance, you don't. You know best.

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If you think your current $ will take care of your kid and/ or spouse then no need for more. Up to you how you want to take care of your family

likehelpful

What’s your income? What’s your age?

Term generally is recommend to replace the income of the deceased spouse. $2m NW is great, but you almost certainly need term.

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We're both in our upper 30s, together make over $300k through work (pre-tax/401k), and I have rentals that generate another $50k. We're very big into investing (>$80k across 401k and brokerages annually), so I don't expect our NW to sit at $2mil either, unless something were to happen immediately after birth.

One way to view a term life insurance policy is income replacement in the event of death of one (or both) of you.
Another way to view the policy is to ensure you can pay off any outstanding mortgage so that the surviving spouse can still live at the house.
But if you feel you are already OK for both of the situations above, you might already be “self insured” with your existing assets and zero debt.

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Another thing to consider, make sure to do your estate plan and set up a living trust

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Thanks! That's next on my list. We already have wills and identified guardians we trust.

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I just went through the similar process, NW is similar but my comp is higher. I think what you want to take into consideration is your annual expense - like will your SO be able to continue working and still cover the expense / mortgage…
Also if you SO needs to stop working / go part time / hire a full time help for a child, the expense math comes out differently.

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This is the point. Income is less interesting than your burn rate. Can the survivor make ends meet without the other’s income?

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Term insurance is cheap enough to just get it and not think too much about it. Especially with your income and nw the monthly premiums are negligible.

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Are you sure you can’t buy more group term through employers? $200k policy seems low given your income

Employers term insurance is bad for two reasons: 1) It is expensive compared to purchasing a private policy. 2) It is not portable when you leave the company

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Get term. 2M, 20 years, $60/mo. Policygenius. c o m.

For 120/month you’re setting yourself up to retire immediately if needed. Remember, can get cancer, lose employment, die. Your employer term will not be in force.

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