Can’t Afford The Life Insurance Policy You Need? A Creative Solution You Can’t Miss

Losing a spouse is up there with the top worst things anyone could ever experience. I worry about it myself. When the weather is bad or when my husband is on nights, I worry about his safety on the road. You just never know.

I bet the thought of what life would be like without your DrSpouse has entered your mind at least once. Maybe you watched an action film or you went through a disaster before. You ask yourself:

How on earth could I move on?
How would the kids move on?

While nothing is able to bring somebody back from death, there are ways to soften at least the financial pain.

That’s what life insurance is there for.

As a medical family, you likely need a 30-year term policy for somewhere between $1 Mil and $5 Mil on your DrSpouse.

Here’s the problem that many residents and fellows face:

You are unlikely to be able to afford this type of policy on a single training income! 😫

There are ways to get what you need but at a lower price.

It’s called laddering.

Laddering Several Policies

This idea of laddering policies is based on the fact that your insurance needs decrease as time goes by.

For instance, as you get older:

  • Your student debt and mortgage will be paid off
  • Kids will be in college or independent
  • Your retirement savings are growing

As your assets grow, your need for insurance tapers off as time goes by.

How Laddered Policies Work

To illustrate a laddered policy concept, say you NEED $3 Mil policy for a 30-year term. If you buy this policy and they pass away between now and 30 years, you will get $3 Mil. After 30 years, you get zero. For a healthy non-smoking 30-year-old, a $3 Mil 30-year term policy would cost close to a whopping $3000 a year.

For single income medical families in training, $3000 a year is pricey 😫

Instead, you could split it up into three policies. That’s what laddering is. While one policy ends, the other continues.

You would buy:

  • one policy for $1 Mil for 10 years,
  • another $1 Mil for 20 years,
  • and another $1 Mil for 30 years.

For the same healthy non-smoking 30-year-old, these three policies could cost around $1500 a year.

Compares to $3000, $1500 is much more affordable.

This laddering also means if your DrSpouse passes away:

  • Within 10 years, you will get $3 Mil
  • Within 10-20 years from now, $2 Mil
  • Within 20-30 years from now, $1 Mil
  • After 30 years, you get zero.

You can buy all your policies from different companies or from the same, whatever is cheapest.

Three separate $1 Mil policies don’t provide as much coverage as one large $3 Mil policy. But it’s much less expensive. And it still provides adequate protection for what you probably need.

Where, How, How Much, And When To Buy Life Insurance (In A Nutshell)

You should buy insurance on your DrSpouse and yourself if you quit work or are expecting a baby. Those events mark when you are relying on your DrSpouse’s paycheck to make ends meet.

By law, you have to buy life insurance through an agent. It’s too bad you can’t just walk into Target and check it out. Wouldn’t that be easy? 😉

You can look and compare life insurance policies yourself on a website like PolicyGenius. Fill out the criteria, print out the list, take it to an independent agent and tell them you want the cheapest one on that list. I also have vetted agents on my Recommended page.

You Also Need Life Insurance On Yourself

Finally, let’s talk about YOU, friend 🤩

It’s a common mistake for medical families to only insure the doctor in the family. You should get life insurance on yourself, too, regardless whether you work or stay home.

Even if you are a stay-at-home parent (SAHP), the work SAHPs do absolutely has monetary value. If you were to pass away, your DrSpouse would need to hire people to do ALL the work you do. And it’s a ton! They very likely have to have a premium nanny for all the weekend, holiday and night shifts when daycares and schools aren’t open. They’ll also need to pay for tutors, drivers, cleaning ladies, and takeout or boxed meal kits.

On top of that, consider the reason why you die in the first place. Reasons include cancer and horrible car accidents. According to this study, an average stay in the ICU with mechanical ventilation costs $10,794, which is far beyond what most attending salaries can afford. Life insurance will help off-set some of the costs.

You need to value your work and think about the possible bills you would incur at the hospital.

Let’s Review

  • Your DrSpouse needs between $1 – $5 Mil for a 30-year term
  • Consider laddering several policies to save money
  • Use PolicyGenius or similar comparison site to shop
  • Buy life insurance on yourself even if you’re a SAHP

In Summary

The pain of losing the love of your life is the worst imaginable. But life insurance will at least take the financial sorrows away.

A typical medical family will need between $1 – $5 Mil policy for a 30-year term. This is too expensive for a single income family to afford during residency or fellowship.

It probably makes sense to consider laddering several policies instead of buying one to save a ton of money. Talk to your agent about laddered policies and see if it makes sense for you.

Finally, while it’s obvious to get life insurance on your DrSpouse as the future breadwinner, get life insurance on yourself, too, even as a SAHP.

I’m a hugger. I’m hugging and supporting you, friend ❤️

To your strong medical family,