I was talking to a friend the other day about how much life insurance he thought he needed for his family. He is not in the insurance industry but he had a pretty impressive answer. He said he thought he needed about $1,000,000 in insurance per child.
His estimate is not entirely accurate but it is closer than most people guess. When you are calculating how much life insurance is necessary you need to take into account your income, the amount of years you will continue working, household debts, spouse’s income, and other factors. A useful tool for calculating life insurance needs is available here.
In our conversation he asked me how much $1,000,000 in life insurance costs. The answer was surprisingly affordable because of his age and health. Since a million dollars in life insurance is a “good round number” I thought I would share some cost estimates for a one million dollar policy. (For cost estimates for amounts other than $1MM, click here.)
$1,000,000 life insurance for 35 year old
10 year term life insurance: $32.25 per month
20 year term life insurance: $56.39 per month
30 year term life insurance: $88.73 per month
*All estimates assume healthy, non-smoker and will vary by state
Click here for updated life insurance cost estimates for 2016.
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