Married With 2 Young Children. How Much Life Insurance Should I Have?

A question that has thousands of different answers. Many answers being right. And many answers being wrong.

Well, lets dive into it and explore how to find the right answer for you.

Keep in mind, you are always welcomed to call or email LifeStein for free guidance and free expert support.

The Life Insurance Equation

• Debt

• Yearly Income

• Yearly Expenses

• Future Expenses

• Inflation

• Goals

DEBT

Let us start with Dave Ramsey's favorite topic. Debt is something many young families have. How can one afford a house without a loan today? Few can but majority cant. So lets list all debt.

• Outstanding Balance on house $250,000

• Car loan balance - $20,000

Yearly Income

If you pass away, how much income is your household is losing?

• $120,000 per year

• How many kids do you have?

  • 2 children

• How old is your youngest child?

  • One child is 12 and the other child is 4

• What age until they are independent?

  • 26 years old seems like a good age

Yearly Expenses

What are your major yearly expenses? Everyone has a different look.

• Mortgage - $250,000 TOTAL

• Food for 3 people = $12,000 per year

• Medical - Health Insurance - $1000 per month

• Car Maintenance & Gas - $200 per month

• School - $2000 yearly

Future Expenses

• Daughters Future Wedding - $60,000

• Sons Future Rehearsal dinner - $15,000

• College Tuition - $150,000 per child

• 2 future cars - $45,000 per child

Inflation

Address for inflation. I would add 2% per year.

Goals

• No house payment

• College paid for

• 2 cars

• $100K per child to help after college graduation

CALCULATE

DEBT - $270,000 (house & car)

Yearly Income - $120,000 (x) 26 years of dependents -- $3,120,000 total

Yearly Expenses -

Food Cost x 26 years, Health Insurance Cost x (26 years - age of youngest), $2400 car maintenance x 26 years, School $2000 per year x 2 children x (26 years old - 2 years old) = $312,000 Total Food Cost, $288,000 total health insurance cost, $62,400 total car maintenance, $96,000 school expenses

TOTAL = $758,400

Future Expenses

$465,000 total

Inflation

Adjust 2 %

Goals

• $100K to each child

$3,120,000 - $270,000 - $758,400 - $465,000 - $100,000 - $100,000 =

$1,426,600 left over

Your Life Insurance Help