Life Insurance Question

[MorganRiley]

If you have life insurance how did you decide how much you should get?

[westernskies]

We did 10x our annual income for each of us with the idea that we could maintain our lifestyle with that sum of money invested and live off the interest.

[LaLaLaLa]

We got our life insurance before we had kids, shortly after we bought our home. We wanted enough that the surviving spouse could completely pay off the home, plus have a cushion of money to take a bunch of time off of work. I'm certain there must be more scientific ways to determine how much you need; now that we have kids we should re-evaluate our situation.

[CameronsMama]

I've heard several different ways of calculating, but a lot has to do with what you can afford. Like if you can afford the premiums, you might consider getting enough that you could maintain your current lifestyle until your kids are grown, for example, but many people can't afford that much. I've heard that you should have enough to cover a years expenses at the absolute minimum. It depends also on what you are hoping to specifically use the money for if the unfortunate happens- if the insurance money would be the only source of income for the family for an extended period of time, you'll want more than if it is simply to help cover a few expenses while the surviving spouse greives. Does that make sense?

Sorry that wasn't terribly helpful was it? The decision was easy for us, as dh has only been with his current employer for a year, and our life ins is through his work, so we jsut have the max that he's eligible for right now.

[abomgardner417]

I know this is probably totally not helpful, or the right way to go about it, but we got as much as we could for the monthly premium we could afford.

[*andiflipping*]

We can't afford much so how we figured was..

We took out enough to pay off to bury the deceased, pay off the house, and take a year off work to figure out what to do.

I wish we could get more to just live off of but no way in our budget.

[MorganRiley]

thanks for all the different answers

we just applied for a policy that will pay off the house if dh kicks the bucket...and enough to cover the funeral ....and maybe a bit leftover.

its really all we can afford for the monthly premium right now

at least i know i wont lose the house...and i make enough money to cover the bills/food etc. on my own


interesting about the 10x your annual salary idea...

for the record we have three kids...but two are from my first marriage...if anything happened to me...they would live with their bio dad.

[Amila]

We had a financial planner assess how much we'd need to cover all debt, allow me to SAH till the kids are in school, and save for college. I HIGHLY suggest looking into AIG because they have a return of premium plan meaning that whatever you pay per month is put into an account, and if you don't die within the 30 years, you get it all back. Sounds too good to be true, huh? Its a nice savings plan. For me for $350,000 its only like $22 a month.

[ashleyhaugh]

ours is through the army, and we got the max for both of us-400k for dh, 250k for me

[MommyinMN]

We have a little over 10 times dh's salary for him and on me we have enough to cover the mortage, funeral expenses and a little left. We would like to increase mine some, to help dh with the kid's college and I would like him to be able to take more time off to be with the kids. I am a SAHM so dh can cover all the bills and he could pay for childcare if the house was paid for. I would need enough to live on until I finished school and even then I am not sure I could make what dh does now. Most likely if something happened to him I would sell the house and downsize, invest money and work a little as possible while the kids were young. It is scary to think about but it is important to have a basic plan I think.

[PrettyBird]

Originally Posted by ashleyhaugh

ours is through the army, and we got the max for both of us-400k for dh, 250k for me

Same here, although we are going to up it for both of us before he deploys again. I need to look around for the best way to do that.

[TiredX2]

On DP we have enough to pay off the house, pay for the kids to go to a state college and enough for me to go back to school and get my teaching degree. With that I could support the kids & myself given that I wouldn't need to save for college and wouldn't have a mortgage payment.

On me we have enough for DP to pay off the house and have a bit left over. With the amount he currently pays for the house he could pay for after-school care for the kids.

[henhao]

I'm pretty good about finances, but I have to admit that I just went with that the insurance company suggested. It's a large enough sum that either one of us could stop working and take time to be depressed. I don't want to HAVE to work or do anything if -- gosh forbid -- DH dies.

What's weird is that his policy is worth 100K more than mine. I'm not sure why that is or how they figured it out.

Don't forget to consider canceling your life insurance once your kids are through college. If you have enough saved for retirement, you may not need that insurance $$ if your partner dies. However, that's a decision for each person to make based on their own unique financial picture.

Right now, I think I'll cancel with DD is about 22, but I don't know.

[MorganRiley]

Originally Posted by Amila

We had a financial planner assess how much we'd need to cover all debt, allow me to SAH till the kids are in school, and save for college. I HIGHLY suggest looking into AIG because they have a return of premium plan meaning that whatever you pay per month is put into an account, and if you don't die within the 30 years, you get it all back. Sounds too good to be true, huh? Its a nice savings plan. For me for $350,000 its only like $22 a month.

THAT Is very interesting information
because through the company we are using....the lowest plan to get your money back is for a 500K policy (and costs like 200 a month!!!)
(we got a 300K policy for 50 a month but we dont get the money back unless dh dies within the 20 year time frame of the policy)


DO YOU HAVE A LINK TO A WEBSITE FOR INFO ON AIG??

[CameronsMama]

Originally Posted by MorganRiley

THAT Is very interesting information
because through the company we are using....the lowest plan to get your money back is for a 500K policy (and costs like 200 a month!!!)
(we got a 300K policy for 50 a month but we dont get the money back unless dh dies within the 20 year time frame of the policy)


DO YOU HAVE A LINK TO A WEBSITE FOR INFO ON AIG??

Just a word of warning...we've several different policies with AIG, and they have been quite a pain to deal with at times. IME, they have great policies but crummy customer service (although I have had a few good interactions, but overall not really pleasant).Nothing I personally consider a deal breaker, just a lot of disinterested reps, hoops to jump through that aren't fully explained, etc. I will admit, it hasn't stopped us from using them, just wanted you to know.

http://www.aig.com/Life-Insurance_20_17671.html

[Pancakes]

Life insurance is an area where we are sorely lacking. I don't have life insurance on myself. Because of some medical issues, IF I can find a policy, I'd have to surrender an arm and a leg to acquire it.

Both kids have a 10k policy. DH has enough to pay off the house and get me by for a while. Or, as we look at it, float me till I sell the house, move back to our home town, educate myself, and buy a smaller home. We really should have double or triple what we do, but the premiums can be a killer.

[Christine&men]

Originally Posted by westernskies

We did 10x our annual income for each of us with the idea that we could maintain our lifestyle with that sum of money invested and live off the interest.

I second that, I read that somewhere when I did the research before getting the insurance. And then we rounded up, the premium is affordable, we did do some shopping though.

[bmhpke96]

Originally Posted by abomgardner417

I know this is probably totally not helpful, or the right way to go about it, but we got as much as we could for the monthly premium we could afford.

This is what we did. We have a 1 million dollar policy on DH right now.