How much life insurance do we need?

booklover

Hello everyone

My husband currently has a term life insurance for 300k and it costs £58 per month with Scottish equitable. We are reviewing our finances at present and are looking to pay less than this. My husband is 51.5 and i am 44 and we are both non-smokers.

We don't feel we need him to insured for more than maybe 150 or 200k? as we are fortunate in that we have no mortgage and our children are 16 and 22. :j

We are both employed and manage ok.

Many thanks in advance...

Fiona

dunstonh

We don't feel we need him to insured for more than maybe 150 or 200k? as we are fortunate in that we have no mortgage and our children are 16 and 22. :j

You work out how much money you would lose in the event of death that the surviving partner needs. Then you choose a lump sum that if invested would pay enough at 5% p.a. to meet that shortfall.

£150k would, for example, provide replacement income of £7500 a year net.

booklover

Thanks very much dunstonh :T

Fiona