She can buy house.

Stop paying life insurance.

Sell house when she passes.

Seems less complicated.

Keep things simple. Complicated plans will cause problems.

If the kids are grown and out of the house does MIL even need life insurance?

It comes down to a lifestyle choice. You have to decide if paying for daycare works best for you and understand the financial impact on the household. There are parent groups and homeschool resources for socialization if that is a priority for you. You could also research what homeschool parents do for preK to see if you can find a solution for your situation. Contact Early Intervention to see if there are any other options for speech therapy. Check with your health insurance to see if they will cover the therapy costs. The other option is tell your husband you are happy with the way things are and we can revisit this when the kids are full time in school.

Go through the mental exercise with your husband of what could be done to eliminate or drastically reduce daycare. Get creative and use your work flexibility. One could start work early the other start work late. Break your day into a morning and evening shift to get your hours in. Put some hours in and Saturday and Sunday to offset shorter work days. Have a babysitter/nanny come in for a few hours a day to help if needed. Getting rid of daycare would add 37K to you bottom line. You would need greater than a 40% pay raise to make that 37K.

This is really more of a lifestyle question. Do you work to live or live to work? Keep your eyes open for new opportunities just be very selective knowing what is important to you. Could you offset your work schedules to reduce or eliminate childcare costs? Shop daycare vs nanny vs Au Pair.

Check with current job to see if they will provide any training or help pay for College classes.