what if you two were both in a car accidnt, you die, the mrs ends up in a wheel chair, cant work ever again??? What happens then?? Sells up pockets 100K and moves in with her parents on the disability pension of 18K per annum....................nice position to be in
First home buyers make debt burden worse
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what if you two were both in a car accidnt, you die, the mrs ends up in a wheel chair, cant work ever again??? What happens then?? Sells up pockets 100K and moves in with her parents on the disability pension of 18K per annum....................nice position to be in
Oh no, suggesting that Gen Y'ers aren't the only generation to spout of less than finanancially literate individuals!
How exactly is this selfish?
Let's say I die (I'm already at a disadvantage because I'm DEAD), my partner inherits my super, the other half of our share portfolio and my half of the houses equity. She is capable of living off her wage with the house commitment, however has already stated that she would sell up anyway due to the memories which would be tied to the house. In the end she would come up around 100k ahead. What exactly is selfish? What it is, is prudent financial management in regards to the limitation of needless outgoings.
show the mrs my two responses and she how she reacts, for 150 bucks out of your super fund i cannot see any reason why you wouldnt insure your loan
Me or my partner dying isn't the lottery. You don't go 'oh hay we should totally get life insurance, so if one of us dies the other gets a pile of money, woopie!!'
And thats a silly argument, by that line of thought ALL financial matters should be put into the perspective that at any point she could 2 weeks pregnant. So we should definitely not commit to buying IP's or margin loans as whilst we can afford it, she could potentially be pregnant and we wouldn't be able to afford the same serviceability!
No, reduce costs where possible to increase invest-able income, insofar to the point wherein potential tragedies would not cause you or your partner to go bust.
FYI: My partner and I have both talked extensively about this together and are in agreement, not life insurance until we have children or extenuating circumstances.
Super insurance pays out a benefit of something like 150k, and a pittance of TPD income. That amount is going to make a world of difference.
BTW you don't have any leveraged investment exposure do you? Because what happens if you have one of your suggested accidents and are TPD, your servicability will reduce and as such won't be able to meet commitments. Either you abstain and always have, or you're hypocritical to your proposed risk management.
And thats a silly argument, by that line of thought ALL financial matters should be put into the perspective that at any point she could 2 weeks pregnant. So we should definitely not commit to buying IP's or margin loans as whilst we can afford it, she could potentially be pregnant and we wouldn't be able to afford the same serviceability!
No, reduce costs where possible to increase invest-able income, insofar to the point wherein potential tragedies would not cause you or your partner to go bust.
FYI: My partner and I have both talked extensively about this together and are in agreement, not life insurance until we have children or extenuating circumstances.
Super insurance pays out a benefit of something like 150k, and a pittance of TPD income. That amount is going to make a world of difference.
BTW you don't have any leveraged investment exposure do you? Because what happens if you have one of your suggested accidents and are TPD, your servicability will reduce and as such won't be able to meet commitments. Either you abstain and always have, or you're hypocritical to your proposed risk management.
I'd say this is a reasonable assessment of your risk management strategy in the event that your partner dies.
Everyone's needs are different. As our circumstances change, our needs for insurance may become greater or they may reduce.
Personally if my wife died I don't think I'd want to work for a while but I would want to do a few things instead. Our insurance covers that.
Having insurance gives you choices. For some people the sales pitch is simply, "If the other person dies, would you like to loose your house, or would you like to loose your mortgage?"
Even if you don't need life, you may want to consider TPD or Income Protection. What does your partner do if something happens but you don't die and become an ongoing burden instead? Keep in mind super is often of no use in these cases.
1) Do you research on Super Insurance you are WRONG
2)Thats your option on not insuring, I was trying to provide debate
3) Me personally, yes I have a decent leverage exposure. If im off work my IP kicks in at 75% of income. If im TPD i get a nice payout. If i die, my dependent are looked after. No I dont abstain nor am I a hypocritical, I am a realist.
Its funny, some people insure there cars for 20K, yet wont insure there lives. My income earnign capacity opver say 30 years is inexcess of 5 Million, Id say yours would be too
I'll add my situation into the debate. I earn about 200k per year, the wife about 130k.
We have one child. We have NO life insurance (other than the basic one provided by our super funds).
We are a year off finishing our PPOR home loan, and could cover most of it with our (significant) cash reserve anyway. We have plenty of shares which could be sold quickly. Our property portfolio is cashflow positive (after tax). Our net worth is just over $1M.
I have income protection insurance.
Personally, I don't think we need life insurance, and don't want to pay for it. I believe that insurance is something that we purchase to manage risks as we see them. For me, I don't think paying for life insurance is required to manage risk. To my mind, it's under control. If my wife or I were to die, we would not need to sell our home.
We have one child. We have NO life insurance (other than the basic one provided by our super funds).
We are a year off finishing our PPOR home loan, and could cover most of it with our (significant) cash reserve anyway. We have plenty of shares which could be sold quickly. Our property portfolio is cashflow positive (after tax). Our net worth is just over $1M.
I have income protection insurance.
Personally, I don't think we need life insurance, and don't want to pay for it. I believe that insurance is something that we purchase to manage risks as we see them. For me, I don't think paying for life insurance is required to manage risk. To my mind, it's under control. If my wife or I were to die, we would not need to sell our home.
Mark, you just repeated back to me what I said - my illustration was of the older fin/ill person.
I don't get your point.
As a stay at home mum, we were advised that many couples ensure that their life insurance is enough to pay off the mortgage. But they forget that if the husband dies, just paying off the mortgage can mean that the wife is forced back to work because the husband's income is gone. Or that the man has to hire a nanny or rely on relatives or quit his job to look after his children.
In our particular circumstances, we insured us both for enough to cover the mortgage plus allow extra to be invested to REPLACE his income. In my case enough cover to pay the mortgage plus allow him to stop working for however long he needed to look after the kids.
Now at 50 and 52, and with only one child left at school, we are reviewing this each and every year, along with hubby's income protection insurance. We still have large loans, so we have kept the insurance. Sure, it costs money at our age, and as our debts reduce and/or hubby stops work completely, we will throttle it back as suits our circumstances.
It was much more important when the kids were younger, but I certainly don't want to be forced back into the workforce due to not planning ahead.
I still don't like paying the premiums though. But like all insurance, it is a calculated risk.
In our particular circumstances, we insured us both for enough to cover the mortgage plus allow extra to be invested to REPLACE his income. In my case enough cover to pay the mortgage plus allow him to stop working for however long he needed to look after the kids.
Now at 50 and 52, and with only one child left at school, we are reviewing this each and every year, along with hubby's income protection insurance. We still have large loans, so we have kept the insurance. Sure, it costs money at our age, and as our debts reduce and/or hubby stops work completely, we will throttle it back as suits our circumstances.
It was much more important when the kids were younger, but I certainly don't want to be forced back into the workforce due to not planning ahead.
I still don't like paying the premiums though. But like all insurance, it is a calculated risk.
I don't get your point.
That's because it wasn't directed at you.
That's exactly how we calculated the amount we needed, too.
Ah! got it now! Cheers.
I took out my life insurance with the thought that if I died, my wife wouldn't suddenly be forced to start working to pay the mortgages, therefore life insurance is enough to pay everything out, so she could simply continue to live there mortgage-free while raising the daughter.
I completely agree with why you did too, Ianvestor, which is the same as our plan, wherein when we have children we will get life insurance. Right now however, she can be shackled to employment like myself.
My wife and I have half of our total debt insured respectively.
We only have Term Life Insurance.
The reason we went half is because of:
a) premiums
b) half the debt wiped out would provide the remaining spouse a very good amount of cashflow after all expenses and quite manageable.
If for some reason both of us were killed outright, the two boys would be left with income and no debt to help look after them.
We only have Term Life Insurance.
The reason we went half is because of:
a) premiums
b) half the debt wiped out would provide the remaining spouse a very good amount of cashflow after all expenses and quite manageable.
If for some reason both of us were killed outright, the two boys would be left with income and no debt to help look after them.
Agreed. It's not just FHB either. Plenty of people are buying consumer goods on borrowed money. I firmly believe that payments on consumer electronics, cars, and even credit cards will dry up long before payments on homes.
Double Agreed...
It is all the financed "frills" that hold most people back. How often do you see someone buy a new home and then they "have to" furnish it... all on credit My view of depreciating items is this: "If you can't afford to pay cash, you can't afford to buy it" .... full stop, no exceptions.
This includes cars... If you're financing a car, you can't afford it in the 1st place. I know people will say, but what about someone who is 18? My answer is still the same. If you haven't got the $, you should either save more or realign your expectations. I have learnt this from bitter experience and will try to ensure my son never falls victim to the same...
Being bad debt free is a liberating experience I am unprepared to ever relinquish again... Perhaps a few "homeowners" need to realize the same.
Not only is this a liberating experience, but so is the experience of having regular incoming funds accumulating, allowing you to easily buy in cash when you so desire, while saving a bucket load on interest. It seems a no brainer too me.
It's also a good feeling spending on something, and before you know it the funds are there again.
I've never felt really comfortable with the credit for luxury items caper myself, even when it seems at times like it's the norm
.Even major reno's on our PPOR's over the years have been 80% or so cash. It's been much the same with cars - have only had a few months of repayments over 35 years.
I guess they rent out the other room that's why they don't/couldn't get HC insurance.
