[quote=poorgradstudent]I’m going to play Devil’s Advocate here.
Your life insurance should not be expected to put your kids through college. That’s what student loans are for.
It’s nice if it can pay off your mortgage, but if your spouse works, realistically you only have to have your life insurance cover “your share” of the mortgage and bills. But if you’re gone and your kids are moving out of the house soon, your spouse may not want to stay in that house forever. A lot of folks eventually downsize when they become empty nesters.
Life insurance is like gambling at a casino tilted heavily in the house’s favor. They’ll always make sure the math for your odds of death vs the premiums you pay are in their favor, and then collect administrative fees on top of that.
Funeral expenses and 1-2 years of income is probably “enough” life insurance.[/quote]
You can always cancel the term life insurance if you no longer need it.
For example, let’s say a person gets a $1million 20 year term life because that person has a $300k mortgage, needs to put 2 kids through college etc.
10 years into the term, let’s say the person has a financial windfall (investments are good, kid doesn’t go to an expensive college, home is paid off), and there’s a sizeable nest egg. Person has the option on whether or not to continue the policy or just cancel it (probably around $800-1000/year for a male in the 40ies in relatively good health)
If one really wants to save on cost, you can get your half of that term life yourself, and half of the term life from your employer if you are w2. They employer generally ensures 2x-3x your salary, and then there’s an option to buy optional term life at a group rate without needed a doctor exam (usually up to an additional $250-300k). The only drawback is if you leave the firm, that supplemental life most likely won’t be portable. But it’s really cheap.
