Term Life insurance expires in 5 years for myself and my spouse

What is y'all's net worth? Will there be any type of estate taxes to contend with? There's also the cost of getting everything moved to only your name. Then there's the lost income. He's self-employed - what is that business worth?

He's a farmer and I'd say business is $750-$1million??

Not a clue about estate taxes and I guess we could see about my name being on everything now. Net worth currently right at 1 million.

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He's a farmer and I'd say business is $750-$1million??

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Okay, so we're not talking an enormous estate here but it's still substantial. You said your total net worth is right at $1 million - if the farming business is close to a million then your net worth is much higher than $1 million. Think about all the equipment he uses for that business, your home, your vehicles, the crop he's growing, etc.. Your net worth, I would assume, is much closer to $1.5 million by the time you add it all up. Maybe more.

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I guess we could see about my name being on everything now.

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And what happens if you die first? Then he has to take your name off of everything.

What if y'all both die at the same time - your kids will be stuck with paying for all of this themselves.

People don't realize how important life insurance really is until they don't have it. Please do yourself and your kids a favor and continue your life insurance. Make sure it is enough to pay for various fees survivors will incur as well as potential estate taxes and pays off any and all debt you two have. That means mortgage, business loans, credit cards, personal loans, etc..

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That’s the point of term - to buy you some time to where your retirement accounts and home equity are valuable enough to replace the policy payout.

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I tend to agree with you to an extent but there comes a time when one's net worth alone is not only high enough to cover outstanding debt at the time of death but it is also high enough to create a need for a tax-free payout to be able to cover fees associated with cleaning up the estate. It's a good thing but it also creates another need.

Term is generally used for the following "needs"

1) Replace a % of lost income for a time
2) Pay off the house and any other debt
3) Pay for college expenses
4) Serve as a backstop in case death occurs before retirement plans are fully funded
5) Final medical and funeral expenses.

If a business is involved, it can be used to buy out other owners (if any) and to pay off business debt.

If some of those needs are no longer needs, then yes, you could back, perhaps to none.

You need to figure out your income, net worth, your spending and any future obligations to do this. My guess is you probably wouldn't need it but your posts don't provide the detail.

Full disclosure -- I'm a Farm Credit guy. I not telling you this story to try to sell you insurance but I see it every year. Somebody passes away and the first thing the family does is call us and see if they had life insurance, most of the time they don't have it.

If he farms he is in the age bracket where he likely owes the most money you guys have ever owed. Farming is dangerous in that he can get hurt and the suicide rate is high among farmers. I'm going to assume he borrows money to operate on. That can be a ridiculous amount of money borrowed at one time. How would you feel if he died in August and owes $1M on a crop note and all the crop in the field? The life insurance wouldn't eliminate the stress but knowing that debt is paid off would make it less stressful.

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How would you feel if he died in August and owes $1M on a crop note and all the crop in the field? The life insurance wouldn't eliminate the stress but knowing that debt is paid off would make it less stressful.

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Appreciate the comment. MY biggest fear honestly is he dies with a crop in the field and wth will I do? Actually my plan is to get as much help as I could to get the crop done and harvested.

We each have $500K through Protective but he has a $1million through another company as when he expanded the farm, the lender required a policy in the amount of the line of credit/max loan amount which is $1 mil.

We've been doing farming since 1997 and have never not paid off our loan in full and had "some" money left over for saving/planning for the next crop year. He may not have helped much with the kids but he's good at the business side of what he does in addition to being a really good farmer. People keep calling him to pick up their land.

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How would you feel if he died in August and owes $1M on a crop note and all the crop in the field? The life insurance wouldn't eliminate the stress but knowing that debt is paid off would make it less stressful.

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This just seems like a bunch of nonsense from a financial perspective and relies on an exploitation of the emotional impact of the death.

And I’m glad you used $1 million, and the poster advocating for the same said the net with could be $1.5 million or maybe more.

Now let’s just say their net worth is $1.634 million. And let’s just say their total liabilities (debt, taxes, etc) is $0.986.

Those numbers are close to the numbers you both were providing. And both of you seem to be advocating for the insurance to cover all of the remaining liabilities.

Now let’s take those numbers in million and turn them into trillions. And if we do that, we magically get the total shareholder equity and total liabilities of the top 10 largest companies in the stock market (Apple, Alphabet, Amazon, Microsoft, Berkshire Hathaway, Facebook, JP Morgan, Johnson & Johnson, Exxon, and Bank of America).

And since the emotional impact of the loss of spouse likely has no correlation with ratio of the size of the debt and net worth, but the ratio between the net worth is highly correlated (which is why they use ratios), you’re essentially arguing for a $1 trillion life insurance policy to help ease the stress of the remaining liabilities if his husband owned those 10 companies.

And since you used long term debt, but used the full amount borrowed, which is a lot scarier looking and a lot larger than the debt obligation in a given period of time, like a year (like we typically calculate income), that is even more exploitative.

Now maybe you wouldn’t really use that full amount, and instead base it one a more short term timeline, maybe a few years and a couple hundred thousand instead, which would be more reasonable from both an emotional standpoint (timeline of dealing with grief) and from a cash flow standpoint.

But it doesn’t seem like the insurance sales industry functions like that. Which is ironic since that actuarial science does, like a complete opposite of the sales part of it.

I think it may be that insurance agents get non- stop death claims and have to deal with devastated families that are facing terrible financial realities. And to disparage a life insurance salesmen for selling TERM insurance is laughable. His commission on that is going to be FAR less than all the whole and variable products he is heavily incentivized to sell. I do not see anything unreasonable about or a function of “ scare tactics “ by considering a ten year term for a reasonable amount.