Adjusting our life insurance amounts... suggestions please?

Reply Wed 9 Feb, 2005 08:23 am
Mr Wolf and I are now readjusting our life insurance policies. Where we get our policies isnt incredibally cheap, but the benefits we get from this company is worth the extra cost. So adjusting our life insurance ( basically raising the amounts ) is turning out to be a bit costly.. more so then we expected!
My questions..
Is there a good equasion to use when trying to figure out a good amount?
For example.. As a general rule, we keep 3 months worth of bills in an operating savings account.
The amount is 3 times our rent + 3 times the car payment and insurance, + 3 times our months grocery bill and 3 times our ' fun budget'. That makes a good round safe number for us and a great cushion in case of job loss/layoff or any other unexpected problem.

Is there a good figure to use for life insurance?
I know that life insurance should NEVER be questioned because you never know what will happen. But right now, we are counting our pennies because we are almost ready to move into a home. And the added 20 or so dollars a month for a policy really makes a diffrence.

Mr Wolf is the sole provider in our house hold. I could easily say that 2xs his income would be sufficient, but then I figure in immediate costs of burial and then the amount drops. On average , a basic burial service is almost 6,000!!! ( grumble )

So, for myself and my daughter that amount may not be enough?
THe reson this is important is because I just learned that my eyesight isnt good enough for me to drive anymore and that makes me all the more dependant on his income. In the event of his death I would have a really hard time getting on my own feet.
In the event of MY death, he wouldnt need such a large amount of money since I am not earning income.

Any thoughts? Suggestions?
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Reply Wed 9 Feb, 2005 10:01 am
Shewolf, honey. Let me suggest this. The most important thing that your husband can do at the moment is to have a good disability plan. It's far more important than life insurance. I know that first hand.
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Reply Wed 9 Feb, 2005 10:08 am
Really? Why would you say that?

Embarrassed .. .. I was about to hit -send- and I had a light bulb click on somewhere...
Disability plan - needed for things you never know will happen. DUH! hehe.

That is a great idea. I have NEVER looked into his disabilityplan. I know that since he works for the state, that there is a pretty good plan that is free to him, but I dont know how long it would last and what it would cover.
Hmm.. great point. Thank you.
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Reply Wed 9 Feb, 2005 06:20 pm
DISCLAIMER : i worked in the insurance business for nearly thirty years(but not in sales), so my advice may be somewhat biased. ... do not rush into anything. you need to set aside some time and draw up a realistic plan of your financial situation : money coming in and going out, future expenses, amount of money you can allocate to insurance, requirements for disability and life insurance ... this may turn out to be a bit of work, but you can't take any shortcuts here. i suggest you visit your local library and ask for some books on financial planning. you may also be able to get help from a local credit union. i would not call on insurance sales rep at this point. you first have to know yourself where you stand. if you have the money, an INDEPENDENT advisor can help you along further, but make sure he/she does not SELL any insurance !!! the cost may be anywhere from$250 upwards for a written plan. credit union/bank should know some qualified, independent advisers. with disability insurance it is very important to get NON-CANCELLABLE insurance with GUARANTEED rates. with life insurance TERM INSURANCE may be appropriate if you are looking for insurance for , let's say 10 to 15 years. it all depends. books have been written about this subject, so it would be impossible to give you definite and suffucient advice this way. i think by realizing that you need to review your family's insurance requirements you have made a good start. DON'T SIGN ON THE DOTTED LINE UNLESS YOU AND YOUR SPOUSE UNDERSTAND WHAT YOU ARE SIGNING ! hope this will help you a bit. hbg
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Reply Thu 10 Feb, 2005 08:19 am
That DID help hamburger. Thank you very much.
The one thing out of your post we HAVE done is the term insurance.
But, having worked in sales myself ( not insurance though) I know better then to ask a rep. Hehe, They will simply do thier job , meaning, up SALE and that isnt something I need right now.
This is turning out to be alot of work, since Mr wolf and I have never really considered the reprocussions of a bad policy until our daughter was born.. .now we have to be so careful we are scared to make a single move.
I neverknew that we could look some of this up at the library? That is a great idea. Thank you for that. :-)
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Reply Tue 15 Feb, 2005 07:27 pm
shewolfnm : here is a site you may find of some interest in your financial planning. i typed 'financial planning' into the google search and got a whole raft of website. this entry is from the 'learningforlife' site. go to 'insurance considerations' for details on this subject. hbg

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Reply Tue 15 Feb, 2005 08:51 pm
Wow, that was a great site!
I think I have been lost in that site for almost an hour!
Thank you very, VERY much! !!
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Reply Wed 16 Feb, 2005 11:22 am
shewolfnm : glad to hear you find the info of some use. you might still want to speak to someone at your local credit union/bank/labour union office to find out if they can provide you with some planning guides (they should be free of charge). by writing things done on paper you'll gain a better overview of your financial situation. if you can't get any preprinted forms, just use a scribbler/notebook/three-ring-binder and give it a go. hbg
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