I've been watching a lot of Dateline like TV shows where husbands kill their wives or vice versa and it seems weird to me how much some of these people have in life insurance(which seems like the motive in many episodes). I understand when young kids are involved or if one parent is the big bread winner but why does a 30 year old couple with no kids and renting an apartment have a 1 million dollar policiy? Was curious what reasons and how much some people have
Life Insurance
- Thread starter davenporter
- Start date
$1M coverage isn't all that much for someone healthy in their 20-30's
We both have around 700K in 20-year term to get us past the parenting years, and $100k whole life policies on top of that.
My no pic wife took out a million dollar policy on me as a birthday present last December. She's so thoughtful. 
Term only. Will be dropping them in next couple years with kids gone and near retirement.
if I had no kids, I would only have what my employer provided.
if I had no kids, I would only have what my employer provided.
Funny part is it always seems like they kill them within a few months of taking out the policy, like they just can wait any longer. That's a pretty big red flag on who to suspect right away.
The couple in your example probably really don’t need $1 million. They were likely oversold by the agent. The widespread availability of low cost term insurance doesn’t help.
I was a life insurance underwriter for 34 years. Back when I started, million dollar policies were rare……now they are commonplace. Competition has done that.
People believe that as long as they can afford the premium then they should be able to buy as much life insurance as they want. It doesn’t work that way. Studies have shown that over insured people have a higher mortality rate. And when you get to a point where a person is worth more dead than alive, then “accidents” start to happen.
For most folks, we would use a “multiple of income” table to determine a maximum amount that is generally acceptable. A 30 year old who makes $35,000 per year, using an income multiple of 30…..would likely be able to get $1m easily. Of course there are other factors that could come into play such as a bad credit history, bankruptcy, etc.
Reality is that a lot of people get life insurance for the wrong reason, using the wrong type, and for amounts that don't make any financial sense. Blame for this mostly falls to parents who (do not) teach the reasoning for insurance to kids, and there are also some agents who rate personal commissions over client's well-being.
Personally, some of mine is free through work, the rest is a term that's still at the original rate from many years ago. Once that rate expires, so will that policy. Mrs. Monzon's already set financially, plus the will / beneficiaries are established. I also have a several page "Notes upon Death" document outlining my accounts, #'s to call for notification / cancellations... sort of a "one stop shop" so family isn't scrambling around trying to tie things together, or ripe for some fraudulent activity.
Personally, some of mine is free through work, the rest is a term that's still at the original rate from many years ago. Once that rate expires, so will that policy. Mrs. Monzon's already set financially, plus the will / beneficiaries are established. I also have a several page "Notes upon Death" document outlining my accounts, #'s to call for notification / cancellations... sort of a "one stop shop" so family isn't scrambling around trying to tie things together, or ripe for some fraudulent activity.
Even with no kids and no mortgage payment? I had no idea. It seems like a good motive for some people.
I'm shocked on those shows when the life insurance is like $100K and they say that is motivation for murder. I guess people kill people for a lot less these days, but it seems crazy to me that people would risk it for that little.
No kids no mortgage? 1M would be a lot and I would say pretty rare for that situation.
We have a 1.5 million on me. Whatever is through work for my wife. I make a lot more money than she does. It’s probably too much but we got it 15 years ago. It terms out the month after I turn 66
We each have $500K Term Life and it costs us less than $40 total per month. Add that to the life insurance we get through my work for ~$900K for me and a flat $500K for spouse and that's another $6 per month. She probably has something through work too-- just never bothered to look. At ~$46/month it just seems like more work to cancel anything than it is to just pay it.
We only have what is through work. We had larger policies in the past but I canceled them.
We have enough saved up that the other would be fine. I invest a lot so any money that would go to premiums is going into the market.
We have enough saved up that the other would be fine. I invest a lot so any money that would go to premiums is going into the market.
Sometimes people also use insurance as part of a broader financial plan, including investments or savings. It might seem excessive, but for some, it’s about peace of mind and financial planning for unexpected events.If you’re curious about how much is typical or what might be appropriate, it’s worth talking to a financial advisor who can give you tailored advice based on different situations and goals.
Thanks quesadilla. I wasn’t sure if life insurance worked the same in Sim City, so it was interesting to hear your perspective.
My no pic wife took out a million dollar policy on me as a birthday present last December. She's so thoughtful.
RIP in Peace. Leave your likes to me in your will.
Yeah I'd agree that is both excessive and rare, other than a situation where one of them has high income (or high income potential) and the other does not...then I could understand it on the high income spouse.
I have a pipeline of young clients who are just starting to make good money but their work is physically taxing. They're usually single when I start working with them; I emphasize three things with them: 1) stay current on your tax liabilities 2) get in the habit of putting some $ away for retirement (mostly push them on Roth IRAs), and 3) get a good disability policy - for them, that's a far greater risk than death (if they die, nobody's really hurt financially because nobody else is depending on their income for housing & food). Once they get married, buy a house, have kids...then the life insurance discussion starts.
I sell it a little bit of LI.. generally always recommend term but some people simply want whole life.
One perspective an agent explained to me, why he carried $2m on his wife and himself.. if his spouse died he would want to retire if that happened. That was his reasoning. I get it but it feels like a reverse lottery. He probably has thoughts of his spouse dying and getting a large payout.
One perspective an agent explained to me, why he carried $2m on his wife and himself.. if his spouse died he would want to retire if that happened. That was his reasoning. I get it but it feels like a reverse lottery. He probably has thoughts of his spouse dying and getting a large payout.
Spouse thinks the person is of better value dead than alive?
I have a $500k, stand alone term-life policy (ends on my 60th bday), and a 2nd policy via my employer. I think that one calculates out close to $400k. I don't live in an apartment and I have kids.
