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If your income increases significantly, or your lifestyle changes (for the better) significantly, or god-forbid, we see hyperinflation.... will you increase your policy?
in the first 2 instances, i dont think i would see the need. i save a nice chunk of money and have a couple of decent size inheritances likely in my future anyway. so one way or another, there shouldnt be an issue with money for my wife and kids in my absence. in the 3rd situation i suppose i would always be open to re-evaluating my needs and making a change. its not overly expensive for the $1 million policy (465 a year) so id be open to going higher if i felt the need.
Are you guys using the rule of 20? The rule of 20 says that you should have life insurance that is 20 times your income, so that at 5%, your family can effectively replace your income.
So let's say you make $50,000. An appropriate amount of insurance is $1,000,000.
I don't have life insurance because I don't have any dependents yet.
Are you guys using the rule of 20? The rule of 20 says that you should have life insurance that is 20 times your income, so that at 5%, your family can effectively replace your income.
So let's say you make $50,000. An appropriate amount of insurance is $1,000,000.
I don't have life insurance because I don't have any dependents yet.
I think that rule is a bit antiquated, because it assumes that one's spouse cannot earn a living. My wife is the VP of Finance for a large commercial real estate company, owning shares of income property to boot.
To me, you really have to look at your total debt picture and what it will take to adequately finance the raising of your kids.
Are you guys using the rule of 20? The rule of 20 says that you should have life insurance that is 20 times your income, so that at 5%, your family can effectively replace your income.
So let's say you make $50,000. An appropriate amount of insurance is $1,000,000.
I don't have life insurance because I don't have any dependents yet.
i didnt use that rule. my savings now could pay off my mortgage and other any debt we have with a decent amount more. so the million would just be living expenses that should go for a while. my wife wouldnt be set for life though like 20 times my income may do.
my wife hasnt worked for a few years now with no plans of going back. she was a reaearch scientist earning about 45k then. not sure what she could get if i dropped dead in the future.
I always heard "10 times your annual income" for life insurance. I have a half million dollar policy on myself. If I were to die unexpectedly in the next 20 years, I think my wife could make it by on a half million, despite what the doom & gloomers say.
When be bought the last policy on my husband a few years ago we didn't do any forumla with his income, we just looked at what we already had (401k, property and work benefits included), how much we would need over and above that, and bought accordingly. It wasn't cheap this time around either, he was over 50 with some heath issues.
We never even came close to having a million dollar policy, even when the kids were babies and we had our health.
I made a statement about the children the OP mentioned (as clearly indicated by the phrase "OPs case mentioned children that..."), and you responded about how the statement doesn't apply to your children. Well, that was the idea, unless you are, indeed, the OP.
My point was that not all children need support... that's all.
We don't know if the OP even has children.
He/she just wants to know if "anyone seen or heard of any instances"... this could all be hypothetical discussion.
Conversations like this usually talk about a man leaving the wife and kiddies.
A young man with a stay-at-home mom and children is going to face unusual expenses if his wife dies .
In many cases Gramma aint gonna be there to sub for day-care which can hurt or destroy a budget.
If she worked and contributed to the household, the loss of her income may need to be made up for.
I think that rule is a bit antiquated, because it assumes that one's spouse cannot earn a living. My wife is the VP of Finance for a large commercial real estate company, owning shares of income property to boot.
To me, you really have to look at your total debt picture and what it will take to adequately finance the raising of your kids.
Maybe yes, maybe no. How much of your income does your family depend on? As VP of Finance, does she travel, work long hours, etc.? Will she be able to continue in that job if you were not around? I know when our kids were younger, Dh traveled all of the time. He never would have been able to do that if I was not around to take care of the kids.
Quote:
Originally Posted by MaseMan
I always heard "10 times your annual income" for life insurance. I have a half million dollar policy on myself. If I were to die unexpectedly in the next 20 years, I think my wife could make it by on a half million, despite what the doom & gloomers say.
Well, that translates to about $25,000/year, is that enough for her to live on? I think the biggest expense people forget about when planning is health insurance costs. If you die, assuming you are carrying the health insurance, she would have to get private plans to cover her and the kids. That can easily be a modest mortgage payment each month, eating up a quarter of that $25K. Then, taxes, normal living expenses, etc. and who knows? Even if our mortgage were paid off, there is no way we could afford to live her on $25K/year--add in taxes, insurance, health insurance and groceries and that money is gone.
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