I buy my term life insurance policy through my employer. When i first bought the policy about 10 years ago, I think it was for $300K or maybe even $350K. Back about 5 years ago, when we were struggling with debt, I reduced the coverage to reduce the premium. I'm not sure what I dropped it to, but I think $200K, or a bit less. When we got our debt problem under control, I didn't remember to increase coverage, until last week.
One of DW's FB friends is a recent widow. She's younger than we are, maybe early to mid 30's. Her post last week revolved around how she is in an on-line forum or group with other widows, and how she can't believe the number of widows whose husbands were not covered by life insurance prior to their death, and how their wives need to sell off property to get bills paid. DW's friend has received payment from a life insurance policy.
Even though I do have a life insurance policy, it is grossly inadequate. Even my previous 300 or 350K would be inadequate to cover my current salary, with now four children, two of whom we're planning to send to college.
The number I'm thinking is $750K. I had that number in mind, and took an on-line evaluation. It came up with (something like) $734,123.58. (seriously, $0.58?) But, we were close, so I'm leaning strongly toward $750K.
I'm not sure what it will cost. I tried to navigate my employer's HR website to increase the amount. I couldn't figure it out, so I sent an email message to HR. They are good at getting back within 24 hours. So I don't know for sure what my current coverage is - same website issue, but I'm fairly certain it's somewhere right around or just a bit less than $200k. I know it's costing me $9.95 per month. I can pull up my earnings statements from the web site, no problem.
If this group has any input about adequate coverage, I'd be happy to read any comments. Brief synopsis:
My salary is about $58K/yr.
DW does not draw a salary.
4 kids ranging in age from 4 - 11.
The eldest two kids will attend college.
I have a laughable EF.
DW is smart, and ambitious, and educated, but the preference would be that she not work until after the youngest child is 18.
Thanks for reading!
Life Insurance
July 1st, 2014 at 08:54 pm
July 1st, 2014 at 09:12 pm 1404249157
July 1st, 2014 at 09:14 pm 1404249268
July 1st, 2014 at 09:45 pm 1404251152
$750k is a good start, and certainly better than nothing. But I don't know that it would be enough to insure wife staying home until kids are grown. I would just work backwards from exactly what your goals are and how much money you need to fulfill those goals. & if the cost of the insurance is ridiculous you can always scale back the goal.
Just one word of caution. I would shop around for life insurance outside of employer. You don't want to be stuck with no insurance if you develop a medical condition and change jobs. (My "couldn't be healthier" spouse was in that boat, but he had good private insurance from his 20s that saved his bacon. Diagnosed with a brain tumor in early 30s. & I do literally remember insurance agent gushing over our medical review results when we applied for life insurance when we had kids, mid 20s).
I'd probably consider getting a private $750k term policy for 20 years (gets the kids through college?). You could certainly supplement with employer policy. But also shop around. $9.95/month doesn't strike me as spectacular, but I have not life insurance shopped for age 40+ yet. If employer insurance is crazy cheap, use it for extra coverage while kids are younger.
We have our "bought very young and cheap" policies from when we first had kids and I also have an insurance policy through my professional association. The rates are absurdly cheap. IT's nice that employment has nothing to do with our insurance. (Beyond making sure the premiums get paid!)
July 1st, 2014 at 09:49 pm 1404251346
July 2nd, 2014 at 01:22 am 1404264121
I have $2M, 25 year policy on my DH bought when we had our first child. I added on an extra $1M 25 policy with our second child. $500k 25 year term on me, mine is $250 year I think and my DH is $1k. Not dirt cheap we bought at 30 and 32, but still reasonable. I also have life insurance through DH's company at 3x his salary = $500k. I SAH and live in a very expensive area. $390k to clear our mortgage.
I bought a lot on both of us just in case to make life easier. For $100/month we have huge amounts of peace of mind.
July 2nd, 2014 at 12:29 pm 1404304168
July 2nd, 2014 at 03:39 pm 1404315569
July 4th, 2014 at 02:34 am 1404441279