How much life insurance do we need?

[CheeseFondueRocks]

We have no mortgage yet, we rent. We want life insurance to cover 2 DC should we both die or a biggish cushion for the surviving spouse if only one of us dies.

How much is the norm? I find this really hard to estimate due to the lack of mortgage.

but you know what your rent costs. Consider what happens if one of you dies - the other has to cover all bills and the childcare.

the life insurers should have calculators for this.

It is a bit of a 'piece of string' question. Only you know what your life-style costs and what options you would want to have available if one or both of you died.

Imagine you go under a bus tomorrow. What would your DP need to get him through until the children are older? Would he be able to work fulltime? Would there be extra childcare costs? How long for? eg if things would be much easier when your children reach school-age, or secondary age, then plan till then.

Then think the same if your DP was the one to die. You presumably lose a fulltime wage. What do you need to keep going in a reasonable way? Could you work parttime? What about childcare? etc

If you both die, then the amounts you are each covered for would probably still make sense for other relatives to have to support the children for that length of time.

Insurance aside, also make sure you have up to date wills making each other beneficiary and having some provision in place for guardianship of children, money held in trust until they are old etc.

Thanks, we are about to organise the will and guardianship thing. It's a little complicated as the children will have to move abroad should we both die. I understand this can be a complicated legal issue.

So it's easiest to plan for what we should need if one of us dies ad assume this would cover the costs for the guardian if we both die.

We took £500k each. We're in our twenties (for another few weeks!) so it worked out to be approx £20 a month. We figured we should just take as much as we could so that if one of us did die the other would have options. We also have a separate policy for the mortgage.

Is that £20 a month each, or together.

I'm already 30 but DH is only 27. We have no health risks.

Our total life insurance bill each month is £56.75 which covers two individual policies for £500,000 and also two individual policies which would pay off the mortgage.

Ah, I see. Thanks. I think we could afford about £30 a month so will just have to find out how much we can get for that.

Well as you don't have a mortgage that sounds totally doable. Just go on a comparison site!

remember to definitely buy two seprarte policies rather than a combined one.