Do you have a plan B?

iVillage Member
Registered: 03-30-2003
Do you have a plan B?
30
Sun, 05-18-2003 - 7:15pm
If something should happen to your spouse do you have a contingency plan? Life insurance can only get you so far. And what about health insurance? Saving for college? Maintaining your quality of life? Would you be able to swing it after the life insurance policy was tapped dry?

Another thing to consider is a contingency plan in case the bread winner lost their job. In this economy anything can happen. No one's job is untouchable. Severance and unemployment is good, but having been there it can disappear pretty quickly.

For us, we could certainly be doing better about a back up plan. Right now we both have life insurance policies, but only through work, which would only give us each a couple 100K if something should happen. And we only have three months of living expenses in the bank. What we have going for us is no debt (except our mortgage).

I would love to hear what everyone (WMs and SAHMs) has to fall back on in case of troubled times.

Pages

iVillage Member
Registered: 12-12-2002
Sun, 05-18-2003 - 7:43pm
Right now, I am probably better setup than most people if my husband were to die.

I have a decent life insurance policy that would allow me to pay off all of our bills and the house, as well as buy land to move the house, where I would be closer to my sister. And I would still have significant money left from the policy to put in savings. Plus, you can figure that I could sell two of our vehicles (why would I need 3?), as well as my husbands trailer for his tools, and maybe most of his tools (or..lol...I might take up woodworking. giggle). That would net me another 20K?

As far as living day to day, I would get a widows pension from the military, which is about $1,000 a month, and I would get a benefit from them for the kids as well. I think it is $250 for each child.

Also, we would receive social security. I think the last benefit was right about $1800 per month if her were to die. We could very easily live on $3300 a month. Especially with no house payment or other debt.

As for health insurance, we would still be covered under Tricare, but it would cost us $40 a month for the family.

If something were to happen to me, he has sufficient life insurance to pay off all our debt, pay off the house, buy land to put the house on, cremate me, and still have some to put in savings.

Now, I'm not sure if the kids would receive any of my social security benefits, should I die, because they are already receiving benefits on his account, due to his disability. However, he is currently bringing in most all of our income (minus my tiny part-time job income), so they would be more than fine, as they would be left with no debt.

Okmrsmommy-36, CPmom to DD-16 and DS-14

Avatar for cyndiluwho
iVillage Member
Registered: 03-27-2003
Sun, 05-18-2003 - 8:01pm
We have plenty of insurance on me but not on dh. All I have on him is 100k through my employer. However, since I'm the primary bread winner and I'd get a couple of grand in survivors benefits per month from SS, we should be fine in spite of not having enough insurance. Of course I may be working until I'm 65 to make sure the girls can go to college but worse things have happened. As for unemployment, we could only go about 6 months past a severance package without me working (I'd get 6 or 7 months severance now). I'm sure I could find something within a year of being let go so we'd be ok. Dh is another story. He has no severance so we'd be tapping savings the minute unemployement ran out and at the tender age of 55, I don't think he'd be finding finding work very easy. Can you spell Walmart greeter?? Fortunately, dh has a job that is more secure in a bad economy and I have enough eduction, experience and connections to replace what I have pretty quickly if need be so I don't see us in trouble because of one of losing a job.

What's scary about our position is that dh is 55 with next to nothing in the way of retirement. He'll be elegible for SS at 62 1/2 but that's it. He has no pension and little in savings for retirement (dh figured he'd inherit from his parents who are headed to outlive him at the moment). He's chomping at the bit to retire but you kind of have to plan for retirement to actually be able to retire. He's not happy but I'm not going to jeopardize my future by funding his retirement at the expense of my own.

iVillage Member
Registered: 03-26-2003
Sun, 05-18-2003 - 8:11pm
We are not as well prepared as we could be but we do have some things working in our favor.

In the case of job loss:

If I lost my job it would not hit us very hard. Of the three sources of income our family has mine is the smallest. Cutting a few corners and him putting in a little over time could carry us until I got another job. Since I now work part time if I had to take a job that paid less I could make up some of the difference by working more hours.

If he were to loose his job we have enough actual cash on hand for about 6 weeks, we have enough stock for a few months.

He gets a military retirement check that would continue and we could start using military medical insurance again.

In case of death:

We are only a few years away from being empty nesters so that in itself helps.

If I were to pass, it would not be a financial hit at all. He could use the life insurance on me to pay all of the kids college expences and minus that to worry about he could easily support the family.

If we were to loose him we have about 7 times his yearly income in insurance. In 7 years our youngest will be 22 so that should carry us along fairly well.

I could start working full time if needed and we could also downsize in housing and cut back expences if needed.

We would have a very small military insurancec check that would continue.

We could start using military insurance again.

iVillage Member
Registered: 03-27-2003
Sun, 05-18-2003 - 8:28pm
We have 500K life insurance policies on each other. We have almost all of the college tuitions paid for (about 2 more months and they both have a paid 4 year college). We only owe $35,000 on our house now. We have no credit card debt (we pay it off every month). We have one car loan (payment under $300). We both make enough money at our jobs to swing it even if the life insurance ran out (which I doubt it would).
iVillage Member
Registered: 03-27-2003
Sun, 05-18-2003 - 8:39pm
Well we are *fairly* well-prepared. We have a good 4-6 months of savings, we have life insurance on each other (which we need to increase, I missed the cutoff this year!).

I am going to school right now, so that I can have my degree and my plan is to go back to work fulltime (or at least 30 hrs a week) once I graduate (my youngest will be in school ft by then).

I know that if something happened to dh (or if he lost his job-which is a real possibility in his career field right now) we would have to scale down from our current standard of living, and there is no way I could sah. I'd have to work fulltime.

But I also have a great family to fall back on, and I'd hope that if something happened to me, they'd be there just as much for dh as they would be for me. I am very lucky.

dj

Dj

"Now when I need help, I look in the mirror" ~Kanye West~

iVillage Member
Registered: 03-26-2003
Sun, 05-18-2003 - 10:19pm
we are in a pretty good position. If my dh died we'd have enough thru life insurance to live off the interest. We would have enough to pay off the house, and to live off the interest. College funds are set up etc....and we have more than enough in our own savings,cap, and stocks.

As for being out of work, we are prepared for that as well. My dh is a banker and luckily we've been able to bank just about every bonus he has gotten. Except for one which we used toward the purchase of our house.

Avatar for biancamami
iVillage Member
Registered: 03-25-2003
Sun, 05-18-2003 - 10:40pm
We're working on that back up plan right now! We moved from our expensive two bedroom in the Bronx to my MIL's rent controlled apartment (her primary residence is in Latin America) in Manhattan so that we could start building our savings account.

Of course, we are a two income family and at this point (with our lower rent) we can easily live on one of our incomes. The other income will go straight to savings. We also have insurance through our jobs.

If worse came to worse we could give up our car which we don't absolutely need...that would save us a huge chunk of money in addition to the rent savings we are enjoying.

Ana
iVillage Member
Registered: 03-27-2003
Sun, 05-18-2003 - 11:11pm
We are working on this now. I congratulate all the savers. Having 6 months worth of salary saved seems impossible for us just starting out with our little family.

In case of death we are in good shape. Dh has a $400,000 life insurance policy. This easily pays off the house and other debt. We have college funds started, but at 4 and 1, they aren't much at this point. He also has a sizable 401K that may lend me more cash if needed, although I'd probably invest it again. I can't see wanting more money!

I am a sahm, so I've been trying to keep my skills up to date with workshops, classes and volunteer work. I want to earn my masters in the next couple of years as a backup plan for other reasons.

In case dh loses his job, not so good, but we are working on it. Our savings only covers a couple of months. Luckily we live in a good area for jobs. Unemployment is under 2 percent here. There are many professional jobs. One or both of us would have to go to work if he lost his current job.

In 2 1/2 years, we'll have all debt paid for except the house, although that is a sizeable debt. Hopefully we won't accrue more, but I see dh drooling over the new H2 Hummers.

Jill

iVillage Member
Registered: 03-25-2003
Mon, 05-19-2003 - 11:16am
If something were to happen to my dh right now, his life insurance would hopefully cover our living expenses until I can finish school. Once I finish school... I will be working FT and supporting my dh so at that point not much would change.
iVillage Member
Registered: 03-26-2003
Mon, 05-19-2003 - 11:20am
Well, considering I'm basically starting Plan B right now ...

Granted nothing *happened* to dh ... but he's basically gone. For good. However, I'll get massive cs so finanically things wont' change a lot.

The courts in AZ require him to carry life insurance equal to what he would pay in cs til the kids are 18. Same for me. Adn, under our agreement, he'll continue to fund their college accounts. In addition, I plan to sock away what I can.

So, as many times as I've said on here to unskilled, neverworked SAHMs, i'm glad I"ve worked all this time so I can support myself. I'm glad we've saved what we did. I'm glad we had all this *cushion*. Because if not, I'd be in a sad state right now.

anyhoo ... i know this post is kinda cryptic and meandering .. but that's how my life is right now ...

Hollie

Pages