Anonymous wrote:How old are your kids? If they are 10 years old or so, you probably only need 10 year term insurance. You could get a million dollar policy for probably $50 a month, so it isn't expensive.

Assuming OP is healthy.

Anonymous wrote:Term insurance is very inexpensive. Get 5-10X. Keep in mine the other parent could die or go broke. Set it up as a trust for your kids.

+1. if your kids lose a parent, the last thing they need is to worry about how to pay for life, college, etc.

How old are your kids? If they are 10 years old or so, you probably only need 10 year term insurance. You could get a million dollar policy for probably $50 a month, so it isn't expensive.

Term insurance is very inexpensive. Get 5-10X. Keep in mine the other parent could die or go broke. Set it up as a trust for your kids.

Anonymous wrote:

Anonymous wrote:Enough to:

A) Either pay off the mortgage on the other parent's house (including your retirement savings)

and/or

B) Fully fund college for each child in a trust.

Assuming your mortgage is $400K (low for this area but a stable one for practically anywhere else in the country) - you should have a life insurance policy of at least $500,000. If you have 2 kids, that means each one gets $250,000 in a trust to be used for college or their first house OR your other parent/guardian can use at their discretion but I'd see if it could go to housing and care for the children first.

Not sure if you can stipulate what the death benefits in a life insurance policy should be used for...unless maybe the beneficiary is a trust and the trustee has explicit instructions.

Yes you can.. through a Trust.

Did you read the second half of that sentence?

Anonymous wrote:Enough to:

A) Either pay off the mortgage on the other parent's house (including your retirement savings)

and/or

B) Fully fund college for each child in a trust.

Assuming your mortgage is $400K (low for this area but a stable one for practically anywhere else in the country) - you should have a life insurance policy of at least $500,000. If you have 2 kids, that means each one gets $250,000 in a trust to be used for college or their first house OR your other parent/guardian can use at their discretion but I'd see if it could go to housing and care for the children first.

Not sure if you can stipulate what the death benefits in a life insurance policy should be used for...unless maybe the beneficiary is a trust and the trustee has explicit instructions.

Yes you can.. through a Trust.

No. Insurance is meant to replace (maybe at a lower level) your income stream. For instance, if you were single parent without support from teh other parent, you would make sure your kids had enough money during their school years. If you are spending 100K/year, then making sure that about 80K is available to them for the next "x" years to them is what you need to aim for.

Your retirement savings can be converted into an income stream over the course of their life (inherited IRA). Make sure you have a will/Trust in place with a good Trustee.

Enough to:

A) Either pay off the mortgage on the other parent's house (including your retirement savings)

and/or

B) Fully fund college for each child in a trust.

Assuming your mortgage is $400K (low for this area but a stable one for practically anywhere else in the country) - you should have a life insurance policy of at least $500,000. If you have 2 kids, that means each one gets $250,000 in a trust to be used for college or their first house OR your other parent/guardian can use at their discretion but I'd see if it could go to housing and care for the children first.

Not sure if you can stipulate what the death benefits in a life insurance policy should be used for...unless maybe the beneficiary is a trust and the trustee has explicit instructions.

I don't know that 10x salary is ever really required, but a lot of times that depends on the salary. I am at 2x salary but have a high income, much of which is not required for day to day expenses.

Life insurance is about income replacement and if your kids don't need that because someone else will provide that then your logic makes sense. But also think about alternative, if unlikely scenarios. What if something happens to both parents. Would they have enough? What if something happens to your ex? Will you be able to get favorable insurance rates at that point?

My biggest expenditure is housing (just bought, so I have a mortgage and no equity yet). If I died, my kids would go live with their other parent who's already paying for their schooling and for a home big enough for them. Also, I have substantial retirement savings, so wouldn't those go to replacing much of my income?

Given all that, is insuring myself at 10x my salary really justified?