It is hard to say. I think enough to cover funeral costs and debts is enough. If you have a mortgage I would probably have enough to cover that, because then you know your family will have a place to live. You also have to keep in mind that your daughter, and your wife if you get married will receive Social Security Survivor benefits if you die. Your daughter until she is 18, I don't know about spousal benefits, and I have know idea how they are calculated.
If your vision plan covers the cost or X% of the cost of vision hardware, then don't drop it. At $3.00/check (assuming you get paid twice a month), you are only spending $72. If you can get new glasses with it, you won't find anything that cheap.
Speaking to the life insurance question, if you are single the minimum amount should be fine (enough to cover burial). If you are married, more would be warranted. You would need to have enough to cover burial and reduce any jointly held debt down to an amount your spouse could handle. More would be nice. If you have kids, you really need to have enough for burial, reduction of debt to a level your spouse and children can live on what she earns, and possibly more for education. I personally have 7X salary plus 8X salary AD&D. It is cheap enough. If I were to die, I want my spouse to be quite comfortable.
1. Supplemental Life Insurance/Accidental Death & Dismemberment: If your daughter is living with you and you are the sole provider - Yay. Get a 20 Year Term policy. It will be dirt cheap. See if you can get an seperate AD&D policy as well. That will be pennies. 2. Dental Insurance: Nay. Wait until she's at least 3 most likely more. 3. Vision Insurance: Nay. Wait a few years. 4. AFLAC: Nay. You can get a LTD poilcy but realize that the 60% you get paid is offset by the 53% SS. So you are paying that much in premiums for 7% coverage. They will tell you if SS doesn't pay then Aflac still pays. And I'm here to tell you that if SS doesn't pay, Aflac won't pay. Possibly a Yay on STD. SS doesn't pay STD. 5. Cafeteria Plan: your call. 6. Cancer: Nay if you have good health coverage. Yay if you don't and you suspect it could strike you in the near future. Also depends on the type of cancer. Lung cancer on some chronic smoking relatives or liver on alcoholics or... vs you not - then Nay. 7. Long Term/Short Term Disability: Nay. see above. Summary. Get Health, Dental and additional Life and AD&D for yourself. Get Health for your daughter if you are her provider. In a few years, add Dental for her. And a year after that, add Vision. You can alway change during the enrollment period. Sometimes you may have to answer additional questions but start small now. my 2 cents.
Pun you're about 27 or 28 right? Assuming you died tomorrow (hopefully that doesn't happen) here's what $50,000 of life insurance will get you. Final expenses (cost of funeral, casket, burial etc) costs about $25,000. This means you will have $25,000 left over to provide for your family. So lets break that $25k down monthly for the next 10 years and it's going to provide $216 a month for the next 10 years. If we break that $25k down monthly for the next 20 years and you're at $108 a month for the next 20 years. This is based upon the 3.5% interest on the lump sum.. Do you think your baby mama/S.O. can raise your 1.5 year old with $108 a month for the next 20 years until she's about the age of being independant? This is just for the baby alone... I'm not even taking into consideration of things like income replacement, having a mortgage loan now or in the future that needs to be paid in the even of death, auto loans, credit card bills, debts you have have, education funds you may want to leave behind for the kid to go to college, money you may want to leave behind for loved ones etc. Lets pretend your 30 years old for simplicity. That leaves you with about 35 good working years until retirment age of 65. Lets pretend you're making $40k per year and if you made that for the rest of your life. $40k x 35 years = $1.4 million. I'm not even taking into consideration of things like inflation, raises etc. You're worth a lot more than you think. Certainly a lot more than $50,000.
Where do you live where a funeral cost as much as a car? I'm getting supplemental insurance, just have to decide how much. Thanks for the info.
I incorporated a few months of grieving for your S.O as well. I'd assume she wouldn't go back to work the day after you passed. That's besides the point though... even if a funeral was $10k - $15k do you think $35-40k would be enough to cover everything I mentioned? It sucks to think about death and the consequences but not having the proper coverage if you pass is worse.
Oh and SS will pay your daughter a decent monthly sum until she turns 18. Unfotunately that decent sum drops to $252 one time payment after 18. What's that going to get your survivors? Money for a shovel? Check on what SS has to offer be loading up. You might be surprised. But you will want to add to it. Also remember that if you pay your premiums before taxes, your benefits will be taxed. If you pay premiums after tax, the benefits are tax free. Important tip.
When my father passed away, we paid about $15,000 for stuff and they already had they burial plot paid for. We also did not go all out, so it was relatively modest.
We just buried my great-grandmother a few weeks ago and the funeral was about $8000. It was nice but not over the top. I guess we should expect prices to fluctuate by region though.
I have about 700k in life insurance (term policy and life ins through work). If I died tonight, my wife and boys will be taken care of. We only have about 130k left on our mortgage, so she would have over 500k to get the boys through college and live her life. Its really pretty cheap. My supplemental policy through work (3X salary) only costs me a few dollars per month and I have a 400k term policy which costs me about $24/month.
I just want to echo what everyone else is saying. Get term life, at least 10 years and at least half a million. It's cheap, especially if you sign up for it now when you are young. Shouldn't cost more than $50 a month.
Essentially, you have a fixed number of payments for a fixed period of time. After that time is over, your insurance expires. If you die during the period you are making payments then the policy pays out the amount you signed up for,
Life Insurance that runs for a specific term of time, usually at a specific rate for that term. After the term runs out (10 years, 20 years, 30 years) the policy ends unless you opt to pay premiums that skyrocket. Basically you are buying insurance for a specific snapshot of your life. It's cheaper because the insurance company reduces the chances they'll have to make a payment of a claim. 30 year old man buys 30 year term policy JUST IN CASE to cover his family and the insurance company makes nothing but profit. The opposite is the traditional whole life policy. That one should be self explanatory. In addition a whole life policy builds cash value while a term life is just a payment you are making that you will never recoup.
Some of you are ridiculous with the amounts of life insurance you guys think is necessary. Nothing like being worth more dead than alive. The fact that Social Security Benefits exist, both parents work, and she probably won't stay single forever means you don't have to have 18 years worth of living expenses. They need to be protected, not hit the lottery.
Why just assume my wife and kids will be taken care of by someone else, or government assistance? She works only part time, so I don't think she could fully support our family on her salary. I originally took 400k, for $24/month. Thats the cost of 2 lunches...basically nothing. Then my work offered me 300k for less than $5/month. No reason to turn that down.
Haha! "Damn honey, I'm not leaving much insurance for you and the kids because you can get government assistance, work more to cover the loss of my salary and/or just go marry someone else and give them a new dad!" By the way $1 million life insurance is not hitting the lottery.
