First, read Norman F. Dacey’s book, What’s Wrong With Your Life Insurance? You can buy a cheap used copy here.
Second, go online and search for “term life insurance.” Select a site. You are looking for the lowest-premium ten-year renewable term policy you can buy. Get a company rated A- or higher –A. M. Best rating. If you don’t smoke, the premiums will be lower.
Third, the wife should buy a policy on her husband’s life: ten times his annual salary (minimum). She must be the beneficiary and the owner. Her husband gives her the premium money. She buys it with money from her exclusive checking account. This keeps the money out of the estate and therefore out of probate. (Note to widows: you want 100% of the money immediately. Do not let the insurance company sell you an annuity. Take the money and set up bank accounts in two banks. Then read Charlotte Foehner’s book, The Widow’s Handbook. Better yet, read it now. You can buy it cheap on Amazon.)
Fourth, the husband does the same for his wife. Minimum: $250,000. If there are several small children, make it $500,000. Day care is costly.
Fifth, get an attorney to set up a simple trust for pre-adult children. Give the trust enough money to pay the annual premium to buy a ten-year level term policy on the chief breadwinner. Buy at least $250,000. The trustee should not be the wife. She may marry a jerk. A good trustee is a husband your age. You can serve as the trustee for his kids’ trust.
If you cannot afford a lawyer, then start here. But I recommend a lawyer.
You do not need to talk to a life insurance agent until all of these steps are completed. The purchases can be made online.
After you have read Dacey’s book, you may not want to talk to a life insurance agent. I know I never talked to one, and I’m over 70. There was no need. My wife was protected. She still is. If I die, she gets $500,000. She can afford the premiums.
My recommendation: never let an insurance agent talk you out of any of these steps. If you want to be pitched to buy something in addition to this coverage — never instead of — you may want to let him in the door. But don’t let him in the door until you have completed all five steps.
If you have a life insurance policy, go through these five steps. Then decide whether to cancel your existing policy.
The goal is to maximum the payout to your beneficiary if you die. Everything else is peripheral. Take care of first things first.
Wives, if you are not protected, and if your children are not protected, take action. Do the research. Then get your husband to sign the policies. Do not take no for an answer. If you are not protected, he is not being responsible. You must be responsible. Cry. Wheedle. Nag. Get lots of headaches. Get him to sign the policies. You know you need to do it. Do it.