How much life insurance do you have?

[blisstwins]

Not the actual amount, but as a multiple of the income you would be replacing? We need to buy on my husband and, at the moment, I am not working. I heard we should get 10x his annual income, but that seems like a lot. He is 35 so I feel like we should buy now before the rates go up a lot.

[KrisM]

I think it depends on a lot of things, other than income. Sure you'll need to replace it if he dies, but how much of it? Do you have a $500k mortgage or a $50k mortgage? Would you want to pay that off? Would you need full-time child care if you had to go to work? Would you still stay home?

That said, we have about 4 times his income on each of us.

Are you going to get insurance for yourself, too, or do you already have it?

[hollybloom24]

I found buying life insurance to be a very difficult process - it was extremely hard for me to think about mortality and then put a price tag on it. I knew we had to do it and it was the right thing to do, but boy was I glad when we picked a company and were done with the process!

We were advised to buy at least enough to pay off our mortgage and any debts we might have and pay for the kids to go to college (taking into consideration inflation rates).

My husband gets three times his annual base salary from his employer, and we purchased about six times his annual total salary (includes bonuses and overtime) additional, although our financial advisers advised us to buy about 12 times his annual total salary (my husband was 45 when we bought it and it was really expensive.) We bought a 20 year, level term policy. We got quotes from three companies, and SBLI was the cheapest.

We chose not to buy life insurance for me since my husband earns much more than I do - if I lost his income it would be a huge deal, but if he lost mine, he'd survive without it.

Good luck - it's important to do, but I know it's hard!

[bubbaray]

I can't remember, how scary is that. I think mine from work works out to be double my annual salary, and DH's is the same. I make more than DH, but even with his, our morgage (only debt, and its very little compared to our equity) would be more than paid off. I think he has a whole life policy that his dad purchased on him when he was a teenager. We should probably have more, but we have very little debt and the tax differential if one of us were to pass would probably even things out.

[pb&j]

Mine is aobut 10x my income - I could get up to 5x through work, and I've carried another policy on our own for several years. For DH, he is self employed, so it's not exactly a multiple of his income - it depends on if you take net or gross. In amount, it's about double mine. Basically, he's got more earning potential than me, and quite honestly, after such a tragedy, I would like the financial freedom not to have to immediately return to my job in corporate America. He, on the other hand, really loves his work, and would never quit.

Both amounts are enough to 1)pay off the mortgage and car pmt (our only debt) 2)make a lot of headway toward paying for college for 2 kids and 3)have some left over for a nest egg.

If we both were to die, the combined amount would leave enough for a trust for our kids to be taken care of until adulthood.

[cono0507]

DH and I both make about the same per year.
We have about 12x yearly income on each of us.

Among other things to consider it is important for stay at home moms to think about getting life insurance - should something happen, their dh would still have his income but would theorhetically need to now pay for childcare, like a full time nanny to care for the kids.

we have a family who has been friends of my parents for a long time. he worked outside the home, she did not. she died suddenly in her late 40s leaving behind 2 school-aged daughters. they had no life insurance for her and were really in a bind trying to be able to afford childcare and housekeeping, etc.

[MMEand1]

I am active duty military, so we have Servicemembers Group Life Insurance...mine is seriously like a crazy amount more than what I make...something like 20x's my yearly income...no kidding! My husband (SAHD) has about 250,000 on him as well.

Good luck, I'm sure it can be quite overwhelming!
Mariah P.

[Momof3Labs]

We have about 12x income on both of us, but that's based on my part-time income. If I were full-time, it would be closer to 8x on me. We wanted enough to pay off the mortgage (our only debt currently), pay for a chunk of the kids' college education, cover additional childcare expenses that we'd incur should either of us die, and leave the surviving spouse with enough financial flexibility to give the kids what they need - may involve taking time off, cutting back hours, or whatever. In addition, if DH were to pass away, our health insurance expenses would increase significantly and I could lose his pension (he's not yet vested), which is integral to our retirement planning.

[jvs195]

We each get 2x our salary automatic from our employers and purchased an additional 11x our salaries each. There are calculators online to help determine and our agent helped us decide. As others have said it's to pay off the debts (mortgage mostly) and provide for DC until they are out of college. It's not inexpensive, but the peace of mind is worth it.

[missym]

One piece of advice I'd offer is to maintain at least a moderate amount of life insurance on each of you at all times. I'm unable to get new insurance coverage since my cancer diagnosis 5 years ago, but luckily I have a pre-existing policy which doesn't allow them to cancel so long as we stay current with our premiums. I'm stuck with a smaller amount than I would like for now, but hopefully in a few years I can increase it.

[o_mom]

I can't remember off the top of my head, but I think it was around 5x annual income (through his employer). It was enough that I would not have to return to work right away, but I do have that potential, so that figured into our calculations. Also, combined with SS benefits for the kids, it would be plenty.

For me, we got enough that DH could pay for good childcare until the kids were in school/older. Again, keeping in mind that SS benefits would be there also.

[KBecks]

It's easier for me to do it in amounts. We are likely under-insured and I should look into more. DH has $400k and I have $500k term policies. So we're really at minimum coverage, that's about 5x our household income.

When I figured it out I took into account social security survivor benefits would supplement our income and I have a job I could go back to.

Now that we're having #3 and are committing to a kind of pricey preschool, I'd feel comfortable with a little more, maybe I need to run the numbers. DH's insurance is more expensive because he's a little heavier.

We have minimal debt, just a $150k mortgage and a car loan. We have emergency, college and retirement savings all in pretty good shape so that also gives me peace of mind.

[Happy 2B mommy]

DH and I are trying to figure this out, too. Last Friday DH met with our agent and came home with soooo much information it was overwhelming.

Right now DH has 3x's his salary at work/professional org. and a bit more that we took out when we got married. There's $100,000 on me, which since I'm not working, would cover childcare/housecleaning for a while.

One bit of advice. Job situations change, so I would take out life insurance w/o considering what you have through an employer. So, if you think you need 10xs salary, don't count the 2xs salary through an employer toward that 10xs amount. DH and I are figuring out what we would need to cover the basics and taking that out on our own.

[dr mom]

10x salary is a good rule of thumb, but I'm only working part-time, so I'm actually insured for way more than what I currently earn. I have a million-dollar life insurance policy, which would completely pay off our mortgage and all debt, provide for college for the boys, and help with child-rearing expenses.

Even more important than life insurance is disability insurance, since adults are more likely to become sick or disabled than dying...and the cost of caring for a disabled adult (income replacement, medical bills) is extremely high.