If you have some self-employment activity you as sole-proprietor can take over sponsorship of the plan. 

I got 2 quotes from larger companies :$5500/side.and one from a small sole proprietor: $4000/side for a Goodman but he would work with me to replace both sides. 

That would mean that the LLC only has one member (you and your wife's tax return) and it chooses to be taxed as a sole proprietor. 

Or should we operate as sole proprietors and use liability insurance to protect against lawsuits and have access to conventual loan sources? 

I'd recommend finding a sole-proprietor plumber instead of using one of the big companies.

If you choose to do business in a state without an entity, such as an LLC C-Corp, or Limited Partnership,then you’re doing business as a sole proprietor and are given no (legal) protections if something goes wrong.  

If the LLC you are forming is a disregarded entity (meaning only one member, not filing a tax return, choosing to be taxed as a sole proprietor) then the IRS looks past the LLC and sees you as the tax payer regardless of who is on deed. 

If it is a single member single asset LLC filing as a sole proprietor then it might be possible to take the membership of the LLC rather than re-deed to their name. 

Between the annual reports and filing fees, and also the overhead necessary to maintain separation of assets so the corporate veil isn't pierced, the cost-benefit just might not be there.Might make the most financial sense (and most streamlined) to run her as a sole proprietor (Sch C) and carry appropriate and adequate insurance, which you should be doing anyway with an LLC. 

I’ve been told to operate as a sole proprietor until I have actual assets to protect/income from the business.