8 responses

  1. Loves2Teach
    May 10, 2012

    Jeff, you’ve got to be kidding. In today’s economy how in the world can someone possibly buy this amount of coverage?

    • Jeff Rose
      May 10, 2012

      People do it all the time.

      Keep in mind though that every situation is unique. This is the amount of life insurance coverage that I felt I needed for my family. In your case, it might be far less.

      If you know you need the coverage, but can’t afford a 30 year term, you could always take the risk of getting a shorter term, say 20 years, so at least you’re covered for that time frame.

  2. Wilkerson, Stephen
    May 12, 2012

    Jeff, my current employer offers coverage up to 3 times my current salary, which is 42,000/year. I want to supplement that, while taking home a decent amount of money after taxes and 401-K deductions. Would your calculation method work for me as a single-father?

    • Jeff Rose
      May 12, 2012

      @ Stephen Being a single father would maybe decrease the amount you need, but not too much.

      A couple of things to consider:

      1. That’s great that your employer offers life insurance coverage, but I would encourage you to go buy it outside of there. Most life insurance that you buy through work doesn’t transfer with you if you ever lose your job. If you buy term life insurance from an independent agent, it will follow you wherever you go and you won’t have to take the risk of your next employer having it and/or you having to pass another medical exam.

      2. While you’re not leaving income replacement for your spouse, you still want to leave some around to help pay for school and perhaps give them a solid start to their financial lives. Only you would know how much that might be. You will want to make sure you have a will in order too (perhaps a trust) so that your kids wouldn’t get all the lump sum at one time.

      Feel free to bounce any more ideas off me.

  3. Anon1
    May 12, 2012

    I agree Loves2teach. There’s no way I could pay that much. I’m barely holding on to my medical coverage. Nice concept, but impossible for me…

    • Jeff Rose
      May 12, 2012

      @ Anon1 Once again, I’m not advising you to go out and spend $2400 a year on a 2.5$ million 30 year term policy. That’s what I felt my family needed.

      Check out this other post http://lifeinsurancebyjeff.com/life-insurance-in-your-30s/ that shows that 30 year old can get a $1 million 30 year term policy for $695 or $57.91 per month.

      Even at half that, a $500,000 30 year term policy would cost you less than $30/mo. Point is that most people can’t afford not too. Buying term life insurance should be considered a top priority.

  4. Felicia Williams
    May 12, 2012

    Agreed. If I had a decent job I could probably swing this. I’m off to bookmark this page for future use…

  5. Anon1
    May 13, 2012

    Thanks for the response Jeff,

    Looking it at it that way, I can see how I could manage a policy. I have a lot to think about and decisions to make.

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