Quote:
Originally Posted by pseudoreality
Well, I did not start my "questionable plan" of long-term financial planning and risk analysis six months ago. I started as soon as I entered the workforce after university. My wife and kids won't end up in the poor house in the highly unlikely something happens to me and we will be better off in the much more likely scenario of me sticking around for a number of years. Between my pension payout and our investments, there are over eight years of my after tax income. After that, she can either move to a cheaper house or find a man that will never live up to me in the eyes of my children. If both of us die, my recently empty-nested sister and her husband will take the kids (and money). This idea that I should be insured to pay out the mortgage and all family expences until the kids are 18 is silly. I don't see why death should be like winning a lottery. My wife is more educated than me and works. She got squirly after a year of materinity leave. She's not going to want to never work again if I die.
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Yeah, it's not that it can't work. You had the same risks (and still do) and have chosen to self-insure. This is just anecdotal though, and it worked for you. Its somewhat akin to not buying insurance on your house and just assuming the risk that if it burns down you will rebuild it and therefore don't need fire coverage. It can work, obviously, and in your case it did.
I don't see a lot of people planning to have every expense covered until the kids are 18, by the way. Instead what it gives people (amongst other things) is an option. You can hold the investments if you die and the timing to sell them isn't ideal; you can buy another house and hold yours if the timing to sell it isn't ideal. It's not about leaving your beneficiaries so they never have to worry about money again. It's about leaving some money so they don't have to worry about these things until they're ready. For some people that is fast, and for others its literally a year or two. I honestly don't know which category I'll fall into; so in the worst case scenario I want to be prepared for the worst case.