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If one of us dies

A bit over two years ago, when I was just about to have our third baby, I thought, “we need more life insurance.” I got the forms and had them ready to submit, when I actually had the baby, and then oops got a brain tumor and after I took care of that (and by “I” I mean “the surgeons”), it was too late, I became uninsurable. So we have some life insurance on both me and my husband, but not enough. I’m in the process of chasing down policies to make sure I know the exact amounts, but it’s about enough to pay off our mortgage, but not, as that weird fundamentalist chauvinist Dave Ramsey suggests, 10-12 times our annual salary. Not by a long shot.

So now I’m thinking, what happens if one of us actually dies suddenly and unexpectedly?

Well, if I die, some of our expenses (my student loan debts, for example) go down. If the mortgage is paid off, and assuming my husband would get rid of one car, his monthly expenses would be $5,120, to pay for himself, our three kids, and his mother, at our current lifestyle level. This includes the kids still doing all of their activities, and it includes all the money we are throwing at debt. His take-home is about $3300 a month. In other words, he’s screwed.

There are some mitigating factors – his student loan bill would certainly decrease, it’s possible that there would be discounts on kid activities, some of the debt payments could be reduced to the minimum level, etc. But on the other hand, we get health insurance through my work, and it would be more expensive through his work. Ugh, screwed.

If he dies, our expenses (me, three kids, mother-in-law) would be a bit under $5000. My takehome from my real job is $2200, and my average freelancing income is typically about $3500. Closer to not being screwed, but not completely, because the freelance stuff is so variable. My student loans would go down.

I’m going to look into private life insurance policies again, but last time I tried, they either didn’t accept me or were prohibitively expensive. I’m wondering how feasible it is to hit not-screwed territory by just getting us into better financial shape.

If I don’t die for another 3 months, our aggressive debt repayment will free up $600 a month. Less screwed! If I don’t die for another 18 months, the repayments will free up $1500 a month. Much, much less screwed!

Even though it doesn’t seem like it because every penny is accounted for, we are living considerably below our means – we just have to pay back for when we were living above our means because our means were so meager.

New goal, beyond paying off debt as fast as I can manage it: live at least 18 months more, keep my husband alive that long, too.

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