Husband vs. Wife: Do We Both Need Life Insurance?

Husband vs. Wife: Do We Both Need Life Insurance?

Lori and Marek Fuchs have never fought in their 16 years of marriage—except over money. In this column, Mr. and Mrs. Fuchs, a real-life married couple with three kids (ages 11, 7 and 5), will articulate their very different approaches to personal finance. Last round, they went head to head over how much to tell the kids about their finances.

This round: She says, "I need a life insurance policy." He says, "Why?"

Mr. Fuchs says: We might struggle when it comes to paying bills or how to talk to the kids about budgeting, but we’re no losers when it comes to life insurance.  Just look: We have a solid seven figure term insurance policy on my life.  Plus, since I’m a volunteer firefighter, I have a separate policy through the fire department in the event I’m ever killed in the line of duty.  If I go, honey—especially in an inferno—you’ll be one merry little widow. 

Mrs. Fuchs says: Don’t talk like that.  By the way, how much do I stand to make?

Mr. Fuchs says: Put it this way: If I die, you’ll be a suspect.

Mrs. Fuchs says: Nice.  And remind me again: How much do you get if I go?

Mr. Fuchs says: Come again?

Mrs. Fuchs says: How much life insurance do we have on me?

Mr. Fuchs says: Very little.

Mrs. Fuchs says: How little?

Mr. Fuchs says:  Uh, none. 

Mrs. Fuchs says:   Is that a good idea?  In fact, many financial planning professionals say it’s a pretty common oversight, a holdover from days far gone when women didn’t make any money and policies were much more frequently written on men.  Problem is, my retro little valentine, women make money now.

Mr. Fuchs says: I know tha—

Mrs. Fuchs says
: In fact, between this column and our videos on TheStreet.com, more of our income is tied together.  If I go, have fun finding a video and writing partner before your next deadline.

Mr. Fuchs says: Good point.

Mrs. Fuchs says: And what about child care?  Despite your contributions around the edges, I do the bulk of it.  With me out of the picture, that means big time bucks for you in terms of child care for three kids, help driving them places, summer camps to augment when school is out and God know what else.  Sidney Franks, principal at Highbridge Finanical Group in Tarrytown, N.Y., puts it right.  He says you have to “close your eyes and picture the future.”  When I do that for you, I see lots of child rearing assistance needed.  That’s expensive, and you have to account for inflation, as Franks is quick to point out.  Unless you own 50% of Apple (Stock Quote: AAPL) without telling me, you need insurance on me. 

Mr. Fuchs says: OK, but only a term policy.  Any other type of policy, the kinds with bells and whistles, that double as investment vehicles, are a non-starter.  When I was a stock broker and a colleague sold one, they’d dance around the office, the commission payout was so high.  That’s never a promising sign for the purchaser.

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