How much life insurance should my spouse and I have and should we have it for our children as well? Derrick N.
There are different opinions between financial advisers on this topic. Some say you should have at least ten times of what each of you make a year and some say you should carry at least a million dollars each. Currently, my wife and carry 10 times our salaries, but we have been discussing raising it to give us a million each. I say the more the better as long as it is something you can afford to pay for several years to come, but you can generally get million dollar policies for each of you for a $100 or less a month.
As far as getting life insurance for your children, this topic just came up with my own family this past week while on vacation with my in-laws as my mother-in-law asked if it would be alright if they bought our daughter a life insurance policy. For one thing, I am pretty sure she wanted to buy a whole life insurance policy, which is an absolute no-no with any insurance policy. Whole life insurance is exactly what it means. You are putting your money in a hole. Secondly, never buy life insurance for your children. Life insurance is meant to replace income in the event of of your or your spouse's death. Since your child is probably not contributing to the household income it is really just a waste. You could however get a $10,000 to $15,000 rider on your own policy to cover burial expenses should something unfortunate happen to your child.
You are much better off investing the money in a college fund such as 529 plan (educational IRA) or mutual fund for your children. In the meantime, check out Zander Insurance for affordable quotes on term life insurance if you are not currently carrying a policy at least 10 percent of your income.
Did you enjoy reading this article? You can receive free full-text articles from Financial Elite by RSS in your email inbox daily by entering your email HERE. Your email will only be used for this daily subscription, and each email will include a link you may use to unsubscribe at any time. Also follow us on Twitter.
No comments:
Post a Comment