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Originally Posted by wincrasher
Depends on the price for the policy - being young, your rate should be low. Because it's fixed on a long term , the rate may be locking in inflation.
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The rate is low.
Quote:
Originally Posted by wincrasher
General rule of thumb is 10X salary of major breadwinner. Remember, the purpose of insurance is not to enrich anyone. It is to provide stability in a time of crisis and help get thru it.
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See the amount is where I get stuck on. I've read a bunch of places that it's 6x, 7x, or 10x. Just seems arbitrary and I don't like being arbitrary with money. The 1 million figure I came up with would assure potential kids of financial support until they reached adulthood and a college education. They can take it from there.
1 mill would be around 33K annually (for 30 years) if they just withdrew from the principal or if they withdrew interest only (not principal) would give them 40K annually (assuming 4% return). These are just ballpark figs not adjusted for taxes or inflation.
Quote:
Originally Posted by wincrasher
You don't want your family to end up homeless if you get hit by a truck buying a hotdog. Figure how much, if you had a couple of kids and a mortgage to keep your family on track until your wife can find a new, less accident prone man to replace you.
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Maybe it should even be more than 1 million then? Because if one spouse passes, it's not really just the income that's missed. It's also the ability to care for the kids. So maybe I need to factor the cost of the survivor having the option of working part time too?