One of the more unpleasant things about being an adult with responsibilities is considering life insurance.
Even though I know where I’m going after I kick the bucket, I don’t like thinking about it at my age. Still, it’s gunna happen someday, and the least I can do for my grieving family is to make sure there’s enough money for them if I take the early train outta town.
Shane and I are evaluating our income needs if we had to assume the worst. For him, I’d need to replace his income and we’d want enough to pay for our son’s college. For me, he would need to pay for childcare, possibly a maid service (I’d want that for him–one less thing for him to worry about!), and some money for our son’s college.
After crunching some numbers and factoring in inflation, we determined that we would need more than the 7-10x income amount that’s typically recommended. Ten times his income right now simply isn’t enough to cover everything.
So anyway, when evaluating your insurance needs, think about what you would need to pay for and see how much that would cost with inflation included. It could be more or less than you think.
I created an Excel worksheet to do my math, but I also found a handy calculator on Bankrate.com. My two figures came within $3k of each other, which is pretty good.
We already have some term policies in place, thanks to a group plan with Shane’s employer.
We’ll buy additional policies to make up the rest of the amount.
I got some quotes from Zander.com (highly recommended by Dave Ramsey) and was surprised at just how cheap it would be.
For us to be fully and comfortably insured, it would cost an additional $30 per month or so. That’s it? We have enough wiggle room in our budget that we wouldn’t miss that $30 per month. Not a bad price for a bit of financial peace of mind, if the unthinkable becomes a reality.
We’ll go ahead and buy our policies as soon as possible, and then every few years or so (and when we know we’re going to have another child) we’ll reevaluate our insurance needs to make sure it still works.