Comments on: Estimating Your Life Insurance Needs http://www.fivecentnickel.com/2006/08/30/how-much-life-insurance-do-you-need/ personal finance tips, tricks, and commentary Sat, 21 Nov 2009 18:35:25 -0500 http://wordpress.org/?v=abc hourly 1 By: Allan http://www.fivecentnickel.com/2006/08/30/how-much-life-insurance-do-you-need/comment-page-1/#comment-126070 Allan Fri, 17 Oct 2008 16:34:41 +0000 http://www.fivecentnickel.com/2006/08/30/how-much-life-insurance-do-you-need/#comment-126070 This is nuts. If you knew you were going to die tomorrow how much life insurance would you buy? As much as you can, same theory when we get injured or killed by accident, the survivor brings suit for as much as they can get. However, there is a clear formula for how much you can get, from both a law suit and from an insurer. It's one's economic replacement value. All insurance companies have tables that they use and WONT issue amounts above those limits. ie. 35 year old can get 25x their income, that's it. So why buy less? Makes no sense. We don't under insure our homes, cars, businesses....so why would we under insure our lives? This is nuts. If you knew you were going to die tomorrow how much life insurance would you buy? As much as you can, same theory when we get injured or killed by accident, the survivor brings suit for as much as they can get. However, there is a clear formula for how much you can get, from both a law suit and from an insurer. It’s one’s economic replacement value. All insurance companies have tables that they use and WONT issue amounts above those limits. ie. 35 year old can get 25x their income, that’s it. So why buy less? Makes no sense. We don’t under insure our homes, cars, businesses….so why would we under insure our lives?

]]> By: Hieronymus http://www.fivecentnickel.com/2006/08/30/how-much-life-insurance-do-you-need/comment-page-1/#comment-79336 Hieronymus Tue, 04 Sep 2007 14:40:14 +0000 http://www.fivecentnickel.com/2006/08/30/how-much-life-insurance-do-you-need/#comment-79336 "Gotta carry enough to take care of the wife but not so much that she'll kill you." $1.5MM x 30 years term life (I'll be nigh on 70 at the end of the policy). Calculation includes mortgage payoff and getting even the last child TO and THROUGH college + grad school; allows for continuation of full-time mothering up to adolescence. Wife considers this "bare bones" (I have to remind her that the policy is in addition to employer benefits and retirement savings) and that, well, I am hoping not to need it... I don't think anyone making use of a policy ever thinks "gee, that was just too much." SBLI is a bargain, btw. “Gotta carry enough to take care of the wife but not so much that she’ll kill you.”

$1.5MM x 30 years term life (I’ll be nigh on 70 at the end of the policy).

Calculation includes mortgage payoff and getting even the last child TO and THROUGH college + grad school; allows for continuation of full-time mothering up to adolescence.

Wife considers this “bare bones” (I have to remind her that the policy is in addition to employer benefits and retirement savings) and that, well, I am hoping not to need it…

I don’t think anyone making use of a policy ever thinks “gee, that was just too much.”

SBLI is a bargain, btw.

]]> By: Mark http://www.fivecentnickel.com/2006/08/30/how-much-life-insurance-do-you-need/comment-page-1/#comment-79173 Mark Mon, 03 Sep 2007 05:40:51 +0000 http://www.fivecentnickel.com/2006/08/30/how-much-life-insurance-do-you-need/#comment-79173 My employer has the best package that my dad had ever seen (he sold life insurance for years) It's something like 10x your annual income with the option to increase it to 20x with a $75 a month payment. My employer has the best package that my dad had ever seen (he sold life insurance for years) It’s something like 10x your annual income with the option to increase it to 20x with a $75 a month payment.

]]> By: Making Our Way http://www.fivecentnickel.com/2006/08/30/how-much-life-insurance-do-you-need/comment-page-1/#comment-21759 Making Our Way Thu, 31 Aug 2006 13:58:42 +0000 http://www.fivecentnickel.com/2006/08/30/how-much-life-insurance-do-you-need/#comment-21759 Choosing the amount of life insurance is almost impossible to calculate without factoring in some very important personal issues: I think many issues about how whether your surviving spouse needed your income to retire, to your financial obligation to your children factor in. I would go for 25 times salary for someone in their 30s - only term. There's little incrememntal difference between 20 and 30 year policies. Regards, makingourway Choosing the amount of life insurance is almost impossible to calculate without factoring in some very important personal issues:

I think many issues about how whether your surviving spouse needed your income to retire, to your financial obligation to your children factor in.

I would go for 25 times salary for someone in their 30s – only term. There’s little incrememntal difference between 20 and 30 year policies.

Regards,
makingourway

]]> By: Aaron http://www.fivecentnickel.com/2006/08/30/how-much-life-insurance-do-you-need/comment-page-1/#comment-21578 Aaron Wed, 30 Aug 2006 17:52:53 +0000 http://www.fivecentnickel.com/2006/08/30/how-much-life-insurance-do-you-need/#comment-21578 One thing you might want to remember is the Social Security benefits that would be available to your family if you were to die. My understanding is that this benefit only applies if you have minor children at home (which I believe is the case for you). In my case, if I were to leave my wife with children to care for, she'd be paid something between 35% and 45% of my current salary (depending on the number of children we had). Not nearly enough to live on, but enough to reduce by a bit the amount of insurance I need to carry. The same might apply to you. One thing you might want to remember is the Social Security benefits that would be available to your family if you were to die. My understanding is that this benefit only applies if you have minor children at home (which I believe is the case for you).

In my case, if I were to leave my wife with children to care for, she’d be paid something between 35% and 45% of my current salary (depending on the number of children we had). Not nearly enough to live on, but enough to reduce by a bit the amount of insurance I need to carry. The same might apply to you.

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