Dear Wife, Here’s How to Spend My Life Insurance Money When I’m Gone!

by J. Money -

coffee letter

You know what’s awesome? Dreaming about all the things you’d do if you won the lottery :)

You know what’s kinda-sorta-but-not-really ALSO awesome? Dreaming up all the things your family can do when you die and leave them all that life insurance money ;)

Because if there’s anything worse than dying itself, it’s dying and then having to deal with a bunch of financial problems while they grieve for you. And it’s a lot harder to worry about that stuff when you know a big fat check is coming in the mail.

The one my wife would get? $350,000. For merely paying $30/mo for my Term Life insurance! The type most of us $$$ bloggers recommend (especially to younger people) because it’s so simple and straight forward: you die, you get the money. You live, you don’t (but you’re still alive, yay!).

We each have our own 30 year policy (she only pays $25/mo, because she’s hotter than me) and we go through USAA. Most people aren’t associated with the military though, so you can check out places like SelectQuote.com which aggregates all of the policies out there to help you find the best, and most affordable, fit. They’ve been rockin’ it for over 30 years, and I think of them as the eHealthInsurance of Term Life which makes it much easier to find a good plan, and fast.

Anyways, ever thought about what your significant other should do with the cash once you croak? I have, and I took a stab of writing it out for Mrs. BudgetsAreSexy in the event it comes sooner than later (*gasp*).

Here it is below – thought you’d appreciate it!

My Wishes For My Life Insurance Money…

Dear Wife,

Remember all those times I told you that if I were to die tomorrow I’d be one happy man? Well, it looks like tomorrow has come and indeed I’m smiling down on you and the boys from above :)

I have another letter for you about how much joy you’ve brought me, but seeing how I’m a personal finance blogger I should probably give you some last final advice. And that’s what to do with this $350,000 you’re about to receive now – how smart were we?? And yes, before you ask, it’s tax-free – what what! I googled it, and the internet never lies. (Too soon for jokes?)

Also, don’t forget about those spreadsheets and passwords in our safe. Everything you need to handle our finances can be found there, just like we talked about. Some of it may be outdated (I’m not that perfect), but you should be able to figure it out just fine from there.

Okay, now to the good stuff! What to do with this $350,000!

#1. Throw $100,000 directly into our savings account! I know how much you value security, and with your frugal ways this should last you decades. Don’t worry about people telling you about inflation or returns or any of that nonsense… Every dollar serves a purpose, and these here are for safety.

#2. Log into USAA and pay off Lexi Lex ($18,240). Just rip off the band-aid with this one and enjoy riding in style now :) Then pay your Toyota forward as your sister had done for us all those years ago.

#3. Set $50,000 aside for each of our kids ($100,000). Log into our Vanguard account and set up a new brokerage account for each of them and just dump it all into VTSAX. This is money for them to follow any of their dreams! Whether it’s college, starting their own business, buying a house/houseboat (I assume we’re not already living in one?), or better yet – pocketing it while taking over the family business :) Maybe don’t tell them about it until they’re 18 though – you know how they can get when they’re excited about something. It’ll also be worth TRIPLE then!

#4. Drop $80,000 into a brokerage account for YOU. This is for anything you’ll need/desire over the years that you don’t want the $100k in savings to cover. You’ll be tempted to just throw this into your savings too, I know, but please don’t! Let it grow for a while, and then don’t be afraid to pull from it when/if ever needed.  Create another Vanguard brokerage account just like you did for the kids, but this time CALL them up and ask what they recommend for this purpose. They’ll ask you a handful of questions like how risk averse you are, among others, and then just follow their lead and you’re all set! You can thank me later whenever you get here :)

#5. Stash $40,000 aside for giving back, please! If you’re seeing this sooner than later, it means the vision for my own philanthropy project never made it to fruition :( If it did, throw it all in there! If not, teach our boys what giving back truly means, and have them help you decide where it should all go. All I ask is that you give it to smaller, lesser known organizations, or even better – individuals you guys cross over the years needing an extra lift. Established organizations do great things, but the joy of experiencing a one-on-one impact really is something to take in. Share the story of the starfish with them! It kills me I can’t be there to do it myself! (Pun very much intended!)

#6. Lastly, give my bff Nate the remaining $11,760 to make sure my blogs live on for eternity :) It’s going to cost him a lot of fees to keep them humming forever, and he promised me he’ll never die… (But you might want to turn it into a hard-copy book just in case. I wish I wasn’t so lazy or else I’d have already done it!)

And poof – you’ve spent $350,000. Now take out a picture of us and kiss me :)

I’ll be seeing you soon, honey… Give my boys the biggest hugs you can muster up! They give me some that are bigger than the moon, which they assure me is made up of cheese. Well, you can tell them Heaven is even better – it’s made up of marshmallows!

XOXO,
Your Hunk of a Husband

PS: I want a party, not a funeral please.

What do you think? What would your list look like?

Obviously it’ll look different for everyone depending on their goals/current finances/personalities, but I highly recommend giving it a shot. It’s a helluva mind trip thinking it through, and it’s eerily exciting too! Not every day you can protect your family like that :)

And if I’m guessing right, you’re the one who probably handles the money in the household, yeah? So they’d appreciate it even more! Not that they can’t make up their own minds once you’re long gone…

In fact, probably better to discuss it ahead of time with them than just setting out a list of demands, haha… I don’t think it pays out if it’s your beneficiary who kills you :)

(*Goes and emails this to wife*)

*******
FYI: Another good exercise? Doing the same thing, but reversing the beneficiary to yourself. Though def NOT something to share with your spouse in case they think you’re getting any ideas!

This article was sponsored by SelectQuote… who hopefully appreciates my humor.

Jay loves talking about money, experimenting, blasting hip-hop, and hanging out with his two beautiful boys. You can check out all of his online projects at jmoney.biz. Thanks for reading the blog!

{ 100 comments… read them below or add one }

1 Dividends Down Under September 28, 2016 at 5:56 am

Yeah, this is such a good idea and I’d recommend it to anyone with a spouse. I made a list / plan that’s *checks* 1,783 words long at the moment. It’s got a financial plan for short term, medium term and long term things to do. Lots of emotional support thrown in there too :) I’ll constantly update it, but my wife really liked it and appreciated it.

Everyone should do it!

Tristan

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2 J. Money September 28, 2016 at 6:25 am

OH MAN – You are a rockstar!!!

Love that you included emotional support too throughout it all. I’m sure it’s not going to be fun looking at whenever the time comes :( Smart to update as the years go by too as goals and what not change.

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3 Jon @ Be Net Worthy September 28, 2016 at 5:59 am

Whoa! It’s a little crazy to think about this early in the morning, but what a great idea! I have like 10x my salary plus more depending it its’ an “accident.” If I happen to die early, my wife and kids will be LOADED! And you are right, I wear the money pants in the household, so a little direction would be good.

Hmmm, this is good food for thought. Perhaps I’ll add it to my list of things to include in the “disaster file.” If I die prematurely, open envelope #1, if I disappear mysteriously, open envelope #2, if government officials show up and drag me away in the middle of the night without explanation, there’s something I’ve been meaning to tell you…

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4 J. Money September 28, 2016 at 6:27 am

Hahahahhaha…

I’d be really curious to learn more about this “disaster file” for real though. You ever write about it before? Want to maybe write a guest post for us on it? :) Ping me on email so I can learn more! budgetsaresexy @ gmail

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5 Brian @ Debt Discipline September 28, 2016 at 6:19 am

I think it’s always a good idea to discuss wishes before hand. This way there is no misunderstanding and it makes it easier on the person dealing with the arraignments.

Now J$ go drink some water and go on a walk, we don’t want you going anywhere for a long time.

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6 J. Money September 28, 2016 at 6:28 am

How’s coffee and rap music? :)

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7 The Green Swan September 28, 2016 at 6:38 am

Good idea to put this on paper, I’ve only talked high level with my wife about what to do. And then I’d say when it gets too complicated to ask my brother for help :) … While he would be good help, I’m not sure that’s how I should leave my wife hanging.

Thanks for the post!

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8 J. Money September 28, 2016 at 7:22 am

Haha yeah….

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9 Anna September 28, 2016 at 6:46 am

1. I now see your true genius- admitting that your wife is hotter than you is good for your health on so many levels.

2. This forward thinking strategy also applies for other things than finances and funerals (I prefer party as well and my family plans on taking my ashes for a road trip). I have instructed my children that once I am gone to give their father a mourning period and then get him a girlfriend/wife/companion/concubine as he is not a fan of living alone. They protested this. I simply told them that after a good 6 months had gone by they would see it my way! :) They said they would opt for a dog but they know I have given “permission” to find him someone else, therefore removing any guilt if/when he becomes too high maintenance for them.

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10 J. Money September 28, 2016 at 7:23 am

Wowww that’s hard to say too ahead of time like that when you’re still alive! But just shows you want him to be HAPPY and that’s what matters in the end! True love for the win!

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11 Mrs. Mad Money Monster | @madmoneymonster September 28, 2016 at 6:50 am

This is GREAT! I definitely handle the household finances and, even though I’ve gone over them with Mr. MMM several times, I still wonder if he would struggle to get everything in order if I wasn’t here. Yikes. My guess is yes. No one likes to think about dying but your letter was quite entertaining. Well done. :)

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12 Roy Largo @ Band of Savers September 28, 2016 at 7:19 am

Last week I was going to bed and had the thought of “what if I didn’t wake up in the morning?” And it got me to thinking about all the info that I need to offload onto my wife incase that happens soon. Several years ago we had a sit down discussion about what she would do if I suddenly died and she informed me that she would sell everything and move in with MY parents to have a support system to help her through the morning process. While all of my lovely spreadsheets might go by the wayside and all of that awesome data and charts would never been seen again I think that I could rest assured that my wife would be able to step up and do just fine managing the family finances without me.

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13 J. Money September 28, 2016 at 7:25 am

Totally. That’s the first thing I’d do myself if something happened to my wife! Gotta be around other loved ones and *then* deal with money stuff..

I meet up with a lot of old retirees every morning at Starbucks and they always say each morning they wake up is a good day :) Something to be thankful for!!

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14 Roy Largo @ Band of Savers September 28, 2016 at 3:32 pm

I was just reminded of something my old boss use to say. If the subject of life insurance of dying on the job (electricians) ever came up he’d comment that his wife makes him have life insurance so that her and her new husband will be able to go have fun since she deserves if after having to put up with him and being poor for so long.

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15 S Shafer September 29, 2016 at 3:02 pm

Roy Largo, me being a well fairly young widow I was in my early forty’s when my young husband passed away.(NO, I did not get life insurance, we had just talk about it a week before his tragic accident) Luckily I’ve been healthy enough to work and make my way. Now that I have been a widow for 15 yrs and I’m getting older. I realize that men don’t understand women are not good at fixing things as fugal as i am I still struggle due to getting rip off by contractors even after doing a lot of research. Wow I never dreamed I would still be unmarried but It just been hard finding a good solid man these days. Men seem to think women just want there money but as we women get older we need to know that we will have financial security not worry if we will end up living under a bridge. Heck I can do that all by myself. Life is hard being a widow, money might of made it easier but it will never replaces their loss. Trust me they will always miss you, but I sure could use some help down here.. Sincerely, S

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16 Chris @ Dadding Value September 30, 2016 at 7:02 pm

Hang in there, S. My mom has been a widow now for almost three years (wow…crazy to think it’s been three years already). You made me think of some things she’s expressed missing the most about not having my dad around: fixing things, spearheading big house projects, installing/trouble-shooting the internet/phone/cable/printer/computer, going to the store to pick up a last minute ingredient she forgot as part of a dish she’s making for a party in an hour…
Anyway, your post inspired me to call my mom and say hello. I just wanted you to know.
Have a wonderful day, S.

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17 Apathy Ends September 28, 2016 at 7:41 am

We have not planned this far ahead, I just increased life insurance for myself and Mrs AE but with a little one on the way now I think we should have gone higher. We get it through work and it’s pretty cheap for the piece of mind.

I should put together a more substantial plan, Mrs AE would be lost…… she probably can’t get into her own 401k right now

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18 Kalie @ Pretend to Be Poor September 28, 2016 at 7:42 am

What an important topic, Jay, and you’ve made it approaching and entertaining instead of a downer. Great advice to your wife! I found Dave Ramsey’s “The Legacy Journey” very helpful for knowing how to have your ducks in a row for the inevitable, and he suggests a “legacy box” and lists all the important documents and info to include.

I’m 100% with you on the party instead of funeral, too!

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19 J. Money September 28, 2016 at 10:31 am

Legacy Box – i like that!!

Whoever dies first, the other one has to go and dance hard at our party – deal? :)

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20 Gwen @ Fiery Millennials September 28, 2016 at 7:57 am

I’m not crying, you’re crying. That is super sweet. Who knew talking about finances could be so adorable?

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21 J. Money September 28, 2016 at 10:34 am

I’m not going to lie…

On the part talking about my kids I did tear up :( Leaving them without a dad would be the worst thing in my entire world.. Freaks me out!!

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22 Penny @ She Picks Up Pennies September 28, 2016 at 8:01 am

Ha! This is fantastic. We both get life insurance through our work, but we’re in the process of talking about maybe increasing it. My husband always jokes that I better set up auto-bill pay on all of our accounts in case I kick the bucket before him. Online banking is not his thing ;) We’re working on making it his thing.

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23 Penny @ She Picks Up Pennies September 28, 2016 at 8:02 am

And 100% the party, not a funeral. Love that the most about this post ;)

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24 J. Money September 28, 2016 at 10:36 am

hehe. thanks :)

I originally had it as “PS: Don’t forget to tell our accountant I’m dead” – but that was too morbid. And I def. want people to HAVE FUN when they get together on my behalf!!!

Maybe I’ll require my wife to have it at FinCon? ;)

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25 Kristy September 28, 2016 at 8:35 am

This is awesome! We discuss this alot actually, well, not alot, but probably more than most people. Maybe I will write it down for him just in case. I love that idea! Oh it is well known that neither of us want a funeral, we both want to be cremated and that there will be a bonfire on the beach to celebrate the lives we had. The worst part is, and I have said this to my hubby before, I honestly hope that it is far away from now and that his parents are already gone. Horrid, I know. But his parents are super religious and are going to be totally offended if we don’t have a funeral. Is it weird that we’ve talked about this? lol

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26 J. Money September 28, 2016 at 10:38 am

Haha… Well, I think about death pretty much every single day since having kids so I’m pretty biased, but no. It’s not weird at all :) Probably makes you appreciate more, yeah?

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27 Full Time Finance September 28, 2016 at 8:46 am

While a morbid subject this one is a must, especially if most of your accounts are managed by one member of the couple. Thanks for the reminder.

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28 Jaymee @ Smart Woman September 28, 2016 at 8:50 am

Haha this was extremely funny as much as it was informational and in all seriousness important!

I just listed in my “To Do” list to get my partner his own life insurance (he hasn’t gotten one yet and I didn’t want to continue nagging, so I’ll just sign him up for one lol). I just hope he doesn’t get the wrong idea like you mentioned in your post! XD

Also, I’ll be brainstorming what I would want him to do with my life insurance if I pass, following your lead. I’m afraid if I don’t, he might just spend it on cars. *shakes head*

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29 J. Money September 28, 2016 at 10:41 am

Haha… at least he’ll be having fun when you’re gone! :)

Heads up on life insurance though – it’s usually a pretty paperwork-heavy process that will def. need his input/signature (and probably a physical exam). Unless he gets it from work or something…

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30 Ms. Montana September 28, 2016 at 8:57 am

I think if it’s just the hubby or myself, we have those details pinned down. Now are we really prepared if we both go? Unfortunately, no. There are a number of letters that need to be written for that. And I really need to talk to some back up guardians for the kids. But that is an awkward conversion. “So how would you feel about raising all 5 of our kids?!”

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31 J. Money September 28, 2016 at 10:42 am

I think that line would have to be followed with, “… and here’s a million dollars to do it!”

I’d consider it :)

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32 Ms. Montana September 28, 2016 at 11:38 am

No joke! We are actually setting it up as a monthly stipend. If you have it written up correctly, they can use that document as “proof of income” for a bank loan for a new house or 9 passenger van (probably both). We are setting it up around the 6k-8k a month mark, which should hopefully accommodate a bigger house, bigger car, and maybe a stay at home parent. Things get complicated when you have a whole herd of kids! Interested? =) j/k

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33 J. Money October 1, 2016 at 3:17 pm

*Goes to shut down blog and get ready for quintupling his kids*

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34 Mike B. September 28, 2016 at 9:07 am

Wow, this is quite the existential post! I don’t share everything financial with my partner, so there’s some room for instruction there. I wouldn’t want to leave her with just my password list, and she’d need access to our account(s). Thanks~

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35 Millennial Moola September 28, 2016 at 9:09 am

I wonder how far out Bluehost will let you purchase domain hosting. I want 2 centuries please!

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36 J. Money September 28, 2016 at 10:45 am

You joke, but I bet they could make a killing offering such add-ons! :)

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37 Deenz September 28, 2016 at 9:11 am

My wife and I each have $500,000 policies for a total of $41.22/month. On top of that, I have a work policy that would give her another $175,000 or thereabouts if I died. I haven’t talked to my wife much, but I do have that piece of paper in the fireproof lockbox with accounts etc on it. I’d like my wife to spend about half of the $675,000 to pay off the mortgage (our only debt!), and invest the rest so that she can pull about 3% out per year of our investments which would be close to $25,000 per year. With her passive income stream of $10,000 (so $35,000 per year income), she should be able to live comfortably and not have to go back to work (she is a SAHM of 3).
Writing it down again definitely makes me feel better about where we are and our plans for the future.

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38 J. Money September 28, 2016 at 10:49 am

Beautiful!

And pretty freakin’ cheap for that much coverage!

We originally intended our $350k to be used to pay off the house free and clear too, but now that it’s been sold it’s all about cash and growth :)

Though of course I wouldn’t be mad if she decides to buy a house outright for our family… Freaky to think about :(

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39 Deenz September 28, 2016 at 11:28 am

Being healthy is one of the best insurance policies you can have. We’ll probably extend it once the 20 year term expires, but the goal is to have the house paid off and enough in investments by the expiry date to not ‘need’ it.
Definitely freaky to think about owning our home outright. Such a big purchase.

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40 Money Beagle September 28, 2016 at 9:12 am

I would likely advise her to, at the very least, fully fund our kids college educations and pay off the mortgage. Then stash the rest away in savings and investments so she has money to live off of to pay expenses for the family.

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41 Free to Pursue September 28, 2016 at 9:59 am

“Established organizations do great things, but the joy of experiencing a one-on-one impact really is something to take in.” True that. The most rewarding giving has been to smaller organizations and to individuals because you can feel the impact of your gift. It’s so rewarding!

OK, now for my beef: this letter got me crying in my coffee before 9am!! I come here for a few LOLs (and hopefully also to learn something) in the morning. But I’ll get over it. It’s a powerful message.

BTW: I’m glad I’m not the only one who stores passwords in the safe for my significant other. You’re definitely reaching the target audience. Online money nerds unite!

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42 J. Money September 28, 2016 at 10:53 am

Thanks, friend :)

I teared up 3 times while writing this. I meant it to be more funny/entertaining at first, but as I got into it I started to *really think* about what it would mean, and thus the waterworks came… Mainly around kids section :( Not every day you laugh and cry about a blog post, haha… Never know what I’ll throw at you!

(And of course you know the mentality behind that one-on-one stuff from our weekend talk :) Get ready for it!! It’s going to do so much good!!!)

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43 Melissa September 28, 2016 at 10:04 am

So not quite on topic, but still relevant…. Sometime in 2015 as my marriage was breaking down but we were still trying to work it out, I started a conversation (for the 100th time) about our debt problem. When I asked him, in frustration, how we were going to get out of the big black hole that kept getting deeper (because of his uncontrolled and compulsive spending), he said: “Well you have more life insurance than me, so…..”

Anyway, I have a $250,000 policy and now my mom is the beneficiary. I hope, if something happens to me, that she uses that money to do all the traveling she dreams about.

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44 J. Money September 28, 2016 at 10:56 am

Your ex sounds like a dud. You free to soar now??

(Awesome response about your mom too – love that :))

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45 Melissa September 28, 2016 at 4:21 pm

Yes. Our divorce was finalized the day after Valentine’s day. I have a pile of debt that I’m shoveling out from under because in the state we lived in, it legally was 50% mine. It didn’t matter that he made 2.5 times more than me. And I wasn’t eligible for spousal support because I had a job and was considered “self supporting.”

Now I know where every penny I make goes… I have a budget AND a 5-year plan to be debt free and it’s on track. By the end of this year, I’ll have paid off 10K of debt… and while the numbers are still nauseating…. I feel great and know I’ve got this.

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46 Melissa September 28, 2016 at 4:26 pm

Oh… and if my mom had to use some of the ins money to paid the rest of my debt, she would still have a good chuck of change to travel with. :)

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47 J. Money October 1, 2016 at 3:19 pm

BEAUTIFUL!! Way to take control and KICK ASS!!

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48 Miss Mazuma September 28, 2016 at 10:54 am

Haha. I just wrote a post about my will last Friday! I left for Thailand yesterday and figured I better get something down on paper…most importantly instructions for my dog and my vacuum cleaner. :) Peace of mind helped me on the 14 hour flight I just endured. I am sure having written yours you feel that same kind of peace. I mean, don’t get me wrong, it would suck to die so young, but at least you know your fam is taken care of.

Now on to the elephants!!

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49 J. Money September 28, 2016 at 10:58 am

FUN!!!!!!

I’m glad checking this blog made the cut even while out there! Haha….

We want pics, please!

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50 Joe September 28, 2016 at 11:01 am

Nice job putting this down. We talked about it a bit, but never really plan it out very well. I should write a similar post.
For us, it would be pretty simple. She can use the money to pay off the mortgage. Her cost of living would plummet after that and it would make life much simpler. She can put the rest in a saving account to use.

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51 Abandoned Cubicle September 28, 2016 at 11:04 am

I’d consider putting the $40K charity fund into VTSAX instead, and then doll-out 10% year after year to charity. I think it gets more mileage over the long-haul. After 20 years, you’d have donated about $80K instead. The savings account is a bit iffy to me – but you can’t argue with the liquidity and safety. Maybe there’s some better alternative that isn’t so conservative and still gives the security?

I told my wife that if I croak early, read Pete’s and your blog end-to-end. If nothing else, she’ll get to see my little icon sprinkled through comments here and there, and be reminded what an intelligent smart-ass her husband was.

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52 J. Money October 1, 2016 at 3:22 pm

Awwww, haha….

For sure – investing the $$ would def. be preferable, but maybe I’ll write up another note that says “don’t open until 6 months from now” and then give alternatives if she’s feeling up to it :) Ans then tell her to read my blog end to end too when she misses me! (and to also make sure it’s still up! Hah!)

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53 Sylvia September 28, 2016 at 11:19 am

Wow, this letter was fantastic! So many people don’t want to think about the future, let alone the not-so-fun stuff, and this was a great reminder to those of us who handle the finances that we should help our spouses and loved ones plan out what to do with the money.

This post made me laugh…and get teary-eyed at the same time! Will be sharing!

Btw – great to see you at FinCon last week.

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54 J. Money October 1, 2016 at 3:23 pm

So glad you liked, Sylvia! Very nice hanging out with you in real life too :)

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55 TJ September 28, 2016 at 11:25 am

I pay like $58/mo for a 30 years of $1,000,000 of coverage. By the time it runs out at age 59, they should easily be a millionaire anyway and have access to my retirement accounts. Everyone thinks it’s dumb that I have life insurance on myself with no dependents, but you never know what will happen with your health to affect the underwriting. I do this for my the benefit of my hopefully future spouse and potential children, but for now my parents can add it to their stash if I kick the bucket before I get married.

As for telling them what to do do with it? I’ll worry about that when the thought of a spouse is actual rather than theoretical. :D

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56 J. Money October 1, 2016 at 3:24 pm

Haha…. yeah, your friends might *really* think you’re weird after that one ;) But logically setting up the insurance so early right now does make a $hit ton of sense! So put me on the side that approves!

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57 Bailey September 28, 2016 at 11:27 am

Hey J-Money! I’ve been a blog reader/lurker of yours for a while, but never felt compelled to write a comment until now. My husband is active-duty military, so this was one of the FIRST conversations we had upon returning from our honeymoon (no joke!) His life insurance is $400k, and we don’t have kids. God forbid, something happens to him, I would move back home with my family for a little while. Immediately, 125k would go into an investment account. My husband wants me to get my Bachelor’s and Master’s degrees, which would be about 30k thanks to a military discount with a certain university I have my eye on. 40k would go to some sort of charities, possibly establishing my own charity in his memory or something. 200k would be spent to buy me a house once I know where I’d like to live. And 5k would be spent traveling somewhere that he and I have always wanted to go. It’s morbid to think about, but as a military spouse it honestly does make me feel more prepared to send my husband to war knowing I have a plan if he doesn’t come home.

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58 J. Money October 1, 2016 at 3:27 pm

I love it!!! And totally a worthy convo – even if just a 5 minute one – esp when the military is involved… There were plenty of times I’m sure my mother wondered if my father would come back after being sent around the world (Marine Corps) all the while raising 3 of us kids. I should ask her if they ever actually talked about it too before? Or had something written up?

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59 Angie September 28, 2016 at 11:28 am

My husband and I are thinking about getting life insurance now – we’re 32 and closing on our first home. What happens after the 30 year term is up though? Do you get a new plan at a larger cost, or just go without?

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60 J. Money October 1, 2016 at 3:29 pm

Yeah, you’d need to get another plan set up by then. Some people in our community feel that at that point we’d have more than enough to self-insure (i.e. live off our investments and probably be in early retirement already) but everyone’s situation – and preferences – are different. We’ll probably take out another plan way before then esp if we continue having more kids and/or go back to owning… It’s good to check-in on things and assess every handful of years :)

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61 Fiscally Free September 28, 2016 at 11:30 am

If I bit the big one, my wife has strict instructions to use the life insurance money to pay off the house. The value of my policy is actually based on how much we have left on our mortgage.
With a fully paid off house, it wouldn’t be too hard for my family to make ends meet going forward.

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62 J. Money October 1, 2016 at 3:30 pm

Wait, does it automatically adjust as the years go by, or do you mean you set it up for the amount that was left at the time of taking out the policy and you two have an understanding that it’ll be used to pay down the house? If it’s the former, would be very interesting to know what type of policy that is as I’ve never heard of before! :)

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63 Jocelyn September 28, 2016 at 11:38 am

Don’t forget there are costs associated with dying! Cremation/Burial, memorial (even if it’s a party, goodbyes are an important part of grieving), possible medical bills, etc

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64 J. Money October 1, 2016 at 3:31 pm

D’oh, good point. Okay, use some from the new savings for that and THEN get back to the plan :) (goes to mark up the print off…)

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65 Done by Forty September 28, 2016 at 11:38 am

We’ve talked about the plan for our life insurance money in the abstract, but nothing too specific.

I think we should make a will…and maybe this sort of plan will be part of that, too?

Or maybe I’ll just steal your post idea? :)

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66 J. Money October 1, 2016 at 3:32 pm

I think you need to go blog about it :)

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67 Financial Panther September 28, 2016 at 11:46 am

As an unmarried guy, I don’t even have life insurance yet. I better figure out things on that front, since Ms. FP and I are getting married next year and might want to start getting on that life insurance train.

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68 Ty September 28, 2016 at 11:49 am

Timely post my man! September is National Life Insurance Awareness Month so good job squeezing this post in before the end of the month!

I’m currently in what I’m calling a “death phase” right now and I’m having a hard time shaking free of it. It doesn’t help that our grandma just passed and that my FIL was just diagnosed with terminal cancer either. It’s not a morbid thing, but I’m just very aware of the fragility of life and it seems to be influencing all of my decisions. it’s not all bad though, because of this I recently got my own life insurance policy taken care of and have had a chat with my wife about what I want/hope for her and our kids should I pass away early. I feel SO much better knowing that this has been taken care of and that we’ve got a plan.

Thanks for the solid post!

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69 J. Money October 1, 2016 at 3:33 pm

Hey, we can talk about death together! :) Very cool about life insurance month – totally accidental!

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70 Linda @ Brooklyn Bread September 28, 2016 at 11:59 am

I literally laughed and cried (being emotionally primed having just watched the little girl tearfully testify in Charlotte). No one wants to think about dying and leaving their family. If it hurts, take care of this business and never think about it again. My good friend at work, who is also our office manager, made sure I got life insurance. Then she went and nearly died after complications from a routine C-section! Thank God she made a miraculous recovery. But I stood at her bedside as a witness when she signed a will that my employer prepared for her when things looked bleak. No one thinks that as a young healthy person they could ever die and leave their family to struggle. My friend is happy and healthy now, alive to enjoy her 9 and 3 year olds. But I will never forget seeing first-hand the comfort it gave her to know, in her darkest most frightening moment, that she had life insurance.

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71 J. Money October 1, 2016 at 3:35 pm

Oh my gosh – stop!!! My heart can’t handle it!

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72 Ten Factorial Rocks September 28, 2016 at 12:30 pm

Good post J. I cover the inheritance bit in ‘what is enough’ – depressing once we understand the reality of how the estate is perceived by beneficiaries. But that should drive us to enjoy life more fully during the time we are healthy and FI and not worry too much about ‘probability of success’ in retirement modeling.

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73 Kate @ itsakatelife September 28, 2016 at 1:04 pm

I’m single/childless so no life insurance for me, outside of the standard benefit offered by my employer, which equals one year of my base pay.

My brother is the beneficiary on everything, so I often joke that he’ll never need to work again if something should happen to me :) While I haven’t listed out HOW the money should be used, I did tell him (based on Suze Orman’s advice) that the money should never be co-mingled with his and his wife’s and it shouldn’t be used for any large joint purchases (e.g. remodeling a house). I love my sister in law, but if they ever get divorced, I want to make sure he gets every cent that I’ve left to him!

My friend and I joke about my will/trust. She thinks it would be hilarious to leave a small amount ($20) to her two kids and tell them they can only use it to buy something socks or underwear. While funny, her kids would hate me!

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74 J. Money October 1, 2016 at 3:39 pm

That IS hilarious!!! :)

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75 Hannah September 28, 2016 at 2:51 pm

Maybe I should add a little humor to my notebook of things to do when I die. It’s a little cold.

Do you think $350K is enough? I guess Mrs. Budgetsaresexy is kind of a rainmaker these days, but that daycare bill is no joke.

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76 J. Money October 1, 2016 at 3:43 pm

I figured she’d move closer to one of our parents/family which would help out a lot (they’re all retired or almost retired), or maybe she’ll just have to use some of that sweet cash for a little bit longer until they’re phased out (cannot WAIT for both of them to be in school full-time!).

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77 Daniel September 28, 2016 at 3:43 pm

I probably have it overbought right now (1.5 million through 3 different policies, ~12x my salary) but I would rather they have too much than too little. That plus survivors annunities from my government job and SS Death benefit means that my family won’t have any financial worries (I know she will also call upon the help of my siblings, one of which is a CPA). Because as a father and husband, the only thing I would want as my life flashes before my eyes is that they are taken care of, that is my fundamental core even I can’t be there to do all the other things I think fathers should do.

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78 J. Money October 1, 2016 at 3:44 pm

Amen, brother. Amen.

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79 Mustard Seed Money September 28, 2016 at 7:33 pm

I haven’t written a letter to my wife yet but you have inspired me. I think would start out by saying take the term life insurance money and get all the money in $100 bills and lay it on the bed. Then please roll around in it and snap a photo for me. If you feel sad please use the bills to blow your nose like Jim Carrey in Dumb and Dumber. Afterwards please place the photo in my casket for me to enjoy. After that feel free to do whatever you want, you were always smarter than me.

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80 J. Money October 1, 2016 at 3:44 pm

Hahahahaha…

Best. Comment. All. Day.

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81 Mrs. Need2Save September 28, 2016 at 7:39 pm

We are over-insured through our current employers thanks to both company-paid life and buying cheap supplemental term life through them. If either of us kicked the bucket, it would honestly give the other the chance to stop working immediately as we would have more than enough for the survivor to live comfortably on at this time and pay off whatever is left of the college-bills for the 2 sons.

I’m glad to see you post on this topic. Estate planning is a serious topic but your loved-ones will be so glad you laid out a game plan for them. In a very serious and emotional time, it gives them guidance from beyond. And you always put a fun spin on it. I don’t know how you do that.

Cheers!

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82 Finance Solver September 28, 2016 at 10:40 pm

This would be a great letter to write to my wife.. If I had one! ;) As a 21-year old, not stressing out about marriage (and don’t know if I will anytime soon) but great point about defining the important stuff!

Nate sounds like a great friend, offering to live forever to work on this blog.

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83 Crystal September 29, 2016 at 12:18 am

I would just hope my husband would remember to look at the disaster file…he doesn’t do well/much when I’m not around. I have made a list of all of our accounts and insurances. Hopefully he’d be able to live okay for 5-10 years while getting back on his feet.

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84 J. Money October 1, 2016 at 3:46 pm

It’s good thing you guys have enough puzzles to entertain an army! :)

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85 [email protected] September 29, 2016 at 8:12 am

Great post! I’ve been writing a “Love Letter” to my wife every year for the past 5 years. I update it every year-end, when I update all of our “numbers”. I print out all of our updated password stuff, attach an updated net worth statement, and update all of our contacts (insurance agent, etc). She keeps it in an envelope “just in case”. It gives me peace of mind to know she’ll be alright. We should all do this – I’ve heard horror stories of deaths where info wasn’t available. If you love your mate, take the time to write them a “Love Letter”!!

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86 J. Money October 1, 2016 at 3:47 pm

Oh wowwwwww!!! I like that idea of updating it every year too since most of us just do it once and then forget as it’s “checked off.”

Really really (really) smart. Thx for the note.

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87 Paul September 29, 2016 at 12:11 pm

I have a 1M policy and I’m second guessing if that is even enough… I suppose as long as I make it about 5 more years it will easily take care of everything forever. but before that time its questionable. Regardless, it would take the edge off and make part time work a worst case scenario.

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88 Your First Million September 29, 2016 at 4:18 pm

I would tell my wife to drop all $350,000 as a 25% down payment on a $1.4 million apartment complex with a 10% cap rate ($140,000 NOI). She wouldn’t have to work another day in her life if she didn’t want to, and this property would pay itself off in 20 years. It could then eventually be passed on to my son.

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89 Chad Carson September 30, 2016 at 9:48 am

Alright, you did it J. Got me misty eyed on a Friday morning thinking about my wife and kids.

You also got me inspired to do my own version of this post and the checklist in the safe for my wife. She has told me before she would not know everything to do if I was gone. So this has GOT to happen soon. Thanks for the push!

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90 J. Money October 1, 2016 at 3:50 pm

Yes it does!!

And she probably wants you to post it online for everyone to see too, hint hint ;)

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91 Latoya @ Femme Frugality September 30, 2016 at 10:38 am

This actually isn’t so bad of an idea. Especially if one spouse handles the majority of the finances. My poor husband wouldn’t know which way to turn so that final letter could be a guide in the even I ever prematurely checked out.

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92 Chris @ Dadding Value September 30, 2016 at 6:45 pm

This is simultaneously heart wrenching and heart warming. Kudos!
I would imagine it was a bit therapeutic to write this to your wife. It reminds me of the book Living Forward, where they help you create a life plan (starting with your eulogy). Having it all written down though (and reviewing it frequently/occasionally) creates “pull power” that guides you to that end.
Great stuff, as usual. You’ve inspired me to create a similar letter for my wife (and finally finish that damned Trust we started last year!).

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93 J. Money October 1, 2016 at 3:51 pm

Haha… yeah, gotta strike while you’re motivated or else who knows when it’ll come up again :) Glad you enjoyed the article! Going now to google Living Forward.

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94 ZJ Thorne October 2, 2016 at 9:56 pm

She has not agreed to marry me yet even though it’s legal. After she agrees, we’ll have a similar letter ready for each of us. She knows where I want things to go, but I will be in charge of our accounts. It’s another way to show love.

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95 EL October 3, 2016 at 2:13 pm

This is a great financial activity to do and worth it, but you’ll never know if she will actually do those things, but you gotta have faith(like George Michael.) If it were me I would bump it up or get supplemental insurance cause 300K cant really replace much income, its only like 12K a year investment income. I would tell her to place all of it in a brokerage, with a checking account feature attached to it. If your a PF household you already have an emergency account. Plus I thought simple is best. Once the whole chunk grows, you can allocate it in the future to kids or to whomever. No need to separate it out, as long as she is aware a specific amount is going to kids. Eventually it will all go to kids too( not being morbid, you started it J.)

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96 J. Money October 4, 2016 at 3:02 pm

Stop it!! :)

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97 Beth October 5, 2016 at 3:47 pm

Why did this make me cry????

This is definitely a great thing to do for sure but I’d be crying the entire time I write my letter. I am an emotional wreck of a person. LOL

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98 J. Money October 6, 2016 at 10:02 am

I take it that you’re just a *beautiful* person :) I teared up writing parts too! (kids)

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99 Francis October 20, 2016 at 2:18 pm

Courageous and genius!

We brefily talked about which family members we would want to raise our kids if something were to happened to both of us. You make a good case about sorting out the financial part when I go or both of us.

I think it’s time we make our plans clear. This was worth the read. Thanks for sharing.

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100 J. Money October 23, 2016 at 3:15 pm

Thanks for stopping by, man. Going over to check out your blog now:)

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