February is the month of love. Every February I do one thing for my family. I reevaluate my life insurance. Do I have enough and how much should I have.
How do you get to those numbers. First take your income and multiply by three or five, of course add in the mortgage. I want to leave something for that little party where my friends say nice things about me and leave the kids a scholarship to school or set them up in a trade.
For the math, lets assume salary of $70,000 so lets multiply that by 5 or $350,00. We got into a good mortgage only $350,000. The party lets have fun $25,000 and for the two kids lets set aside ‘$50,000 to get them set up. That works out to $825,000. Now we could reduce for social security, pensions or 401 k or we could add another few bucks and get a million.
The budget dictates but if I drop a cup of coffee and a couple of less important things the budget works. What about me you may ask. Yes I had multiples of those numbers and even have permanent insurance that is guaranteed to out last me. At 70, I have never felt bad about the money I spent on the insurance and am pretty happy I did not have to use it. But I always knew my family would be OK.
Thanks for indulging me
-Ted