...insurance policy? I am his wife and was advice my our financial planner to have a one million dollar policy so that I could pay off the mortgage (~350K) as well as car payments and the like. This does not seem excessive to me, but my husband is now furious. I have been married to him for nine years and he brought it up tonight for no reason.
My father, who also was a physician, died last month and left me three million dollars in a trust fund. So I have my own money, plus I have my own 401 K (95 K) and my own brokeragge account (120K).
Is my husband wrong to be so upset about a silly one million dollar life insurance policy????????
Thanks-

If you are thinking about using the $1000000 to replace his income, and you were able to manage that at 8% consistently, that would generate $80000 a year. Yes, this is an overly simplistic calculation, but you get the point. How much does he make in his practice?

Oh, he may also be suspicious of this planner if he sells the things he recommends. There are fee-only financial planners who have fewer conflicts of interest. They amount you pay for planning could be easily saved over the years you plan on owning that insurance policy.

With 3 million dollars in a trust fund who needs life insurance, a waste of money...

I don't even have one insurance for myself and I don't see why you would want to have that life insurance for your husband? If he was the one who raised this issue, it would be a different story cause he's not the one who is going to have the money. see?

I DO hope you bought TERM innshorance and not some puff piece called Universal Life or Whole Life or ANY KIND OF Cash Value Life insurance.

But! On to the controversy. With ALL of the money YOU have, the FACT is a $1,000,000 policy on him is overkill (pardon the pun)

Why? Well, fact is YOU DON'T NEED IT. PERIOD.

You may WANT it, but you don't NEED it.

If your husband DIED tomorrow, (JUST a hypothetical) financially, would you CARE?

NO!

Why?

Because you already got all the money in the world in that trust fund.

I don't have ALL of the info I need here to fully answer this question but IF you do not have any liquid funds then YES a 1 million dollar policy is in order.

Put into a SAFE investment of say 4-6% a year it would yield you some $60,000 a year before taxes. WHAT is your monthly outlay for motgage, car payment, food, household expenses, ect? If MORE then $60,000 before taxes then you would need MORE life insurance. Don't forget the future tuition expenses for the kids.

A million bucks of life insurance is NOT that much for a person making say $250,000 a year IF that is your SOLE source of income after his death.

The FACT is, actuarily, you husband in not going to die, at least not soon. Life insurance is ONLY for the purposes of covering the fact of his lost income IF he should die prematurely. If he continues on as a Super Duper Pooper Snooper (or WHATEVER his specialty is) and puts sufficient assets away into the proper savings account, in 20 years of marriage you can DROP your life insurance policy and PUT THAT PREMIUM into the savings too.

SO! All in all, a million large in your case is actually a bit small. Tell him to get a grip on himself but don't be put out if he starts to check his coffee sweetner in the morning or if he starts checking under the hood of the car before leaving for work. Large limit insurance policies can have a paranoid effect on some professionals.