Friday, May 27, 2011

Life Insurance

I haven't really talked about life insurance.  But with the death of family friend and many recent deaths this year and last, I have to face reality and look at what I am leaving my family in the case I die. When we first got married, I think we got 200k for me and 100k for my wife.  After two kids, we upped it to 300k for me and 150k for my wife.  My policy allows me to get up to 1/2 of my current coverage.

I'm told I should get 10x my current salary.  I'm thinking I need to up it some more.  Maybe to 400k or 500k, but not 10x my salary... I definitely can't afford that.

I'm currently paying $28.25 for 300k/150k.

If I up it to 400k/200k the premiums would be: $37.61
If I up it to 500k/250k the premiums would be: $47.08

So yearly payments:
300k/150k = $339
400k/200k = $451
500k/250k = $565

That means for each extra 100k I want to insure, it would cost an extra $110 each year.  In the case of my death, I know 500k would help my wife and kids tremendously.  For the past few years, my insurance has refunded up to 25% of premiums.  So in actuality that $565 is actually $423... which means it's not as bad as I first calculated.

How much are you covered for in case of death?

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