Asked by trish  |  Submitted November 16, 2015

# How much life insurance do we need?

My husband was able to get us both coverage through his employer, but we fear it is not enough. We have two small children, 8 and 5, and own a home we owe about \$200,000. I am a stay at home mom. How do you determine how much life insurance you need?

November 18, 2015

Trish, what would happen if either your income, or your husband's income was lost if something happened to either or both of you? Your biggest asset is your ability to get up in the morning and go to work. Unless you have assets you would want to sell off to replace lost income, I would suggest looking into getting enough life insurance to cover the loss of income for a certain period of time, at least until your children graduate from college.

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December 11, 2015

Trish, try this quick method for getting to the answer:

Determine how much you spent to get through life last month. Closer to \$3k or closer to \$5K? Let's say it was \$4K to get Trish and family through a month of living. Subtract \$1K since when one of you passes, the monthly need will shrink a bit. That's \$3K per month based on a "right now" number. That is also a \$36K annual need. Multiply by 10 years, and your have a \$360K bucket of money to draw from for that long - and it fits your monthly needs. See how using the current month's expenses lets you bottom line the annual and future needs? Want a 5 year bucket so that you pay less of coverage? Cut the \$360 in half and buy that much. Hope that helps!

\$commenter.renderDisplayableName() | 02.19.20 @ 01:51

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February 18, 2016

Trish,
The question you need to ask yourself is how much do I have in debt and if something happens do I have enough to pay these things off or can I support myself and pay for them without insurance. Also it's great to have insurance through your employer but find out if you can keep it if you were to leave the company or retire. Also those children need life insurance also.

\$commenter.renderDisplayableName() | 02.19.20 @ 01:51

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