Gary and I want to get life insurance. Currently he does not have any. I have free life insurance through my job which equals my yearly salary, $45K. We are wondering how much insurance should we get.
We don't have children yet.
We don't have a mortgage yet.
Gary only has my car loan on his credit and that is $14,000; even though I make the payments.
I have student loans and credit card debt equal to about $20K.
So is there an equation to figure out how much life insurance we should both have?
Calla
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Re: How Much Life Insurance?
We didn't buy any life insurance until we purchased our home. At that point my hubby wanted to be sure that I wouldn't have to move if something happened to him -- so he took out a policy on him to cover our mortgage payments. I continued to have just the 1x salary through work since he could cover the mortgage without me, but I wanted something there to cover immediate expenses.
The formula depends on your needs, and isn't the same for everyone. What is it that you would want if something horrible happened? Do you want to be able to stop working for a few months? Or do you just want to make sure that the existing debt won't be a problem?
My guess is that 1x salary for each of you should be plenty at this point in your life.
If you decide to have children this would change significantly!
Julestrd
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Re: How Much Life Insurance?
I don't know that there is an equation. But we have ours on what we could afford. Ours is very cheap right now, but as we get older the price starts to increase. But it will cover all our debt. That may be something else to look into.
CubanBride
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Re: How Much Life Insurance?
I just went to insure.com and filled out a form that helps you to estimate how much insurance you will want. Ours came out to $1,337,000. That provides $60,000 in college tuition each for 2 children. That also provides $2,000 a month in household money for 30 years. Also includes money to pay off all debts.
raken40
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Re: How Much Life Insurance?
cubanbride, you have fm~
september2004
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Re: How Much Life Insurance?
no children, no mortgage = no life insurance for us outside of what is included in our benefits from work.
once we take the next step we will reevaluate our situation. our accountant stressed the importance of long term disability coverage one should look into separate from what some workplaces provide (as it tends to provide less coverage at a higher cost).
we personally don't see a need for life insurance now, but will look into it once we buy property and/or have a kid...
skew
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Re: How Much Life Insurance?
Posted by Julestrd
I don't know that there is an equation.
according to my father, there definetly is an equation. i'll have to ask him again though. something to do w/ factoring in the death tax (of which i thought they were doing away w/).
what kind of B S is that anyway? we work our a s s e s of our whole life whole to provide for ourselves and children and the government takes 50% when you die.
