How much is too much (life) insurance?

B

beng

Guest
hi.i have being using AAM for a while now but have only just registered. i have a question or two ;firstly how much is to much insurance on a married couple in their 30s, two kids a house and a dog? life cover for a mortgage, life & serious illness [both lives],salary protection[both],bupa[essential plus no excess],house,car,pension and avc's.secondly in terms of a percentage of net income what is the average cost of
1.health care [including bupa/vhi]
2.household running costs [esb, phone, heating, etc.]
3.food/drink
4.entertainment
5.insurance [as in first question ]
6.debt repayment levels
7.savings [long term & short term}
8.car/s [running costs]
9.childcare
10.clothing
11.misc.
or is there any model of household budget out there with this sort of information available on it?

title edited slightly by ajapale
 
Re: how much is to much insurance?

There are some general discussion about budgeting elsewhere on AAM including in the forum in case they're of any interest to you. I'm not sure about there being average/standard percentages or general rules of thumb for insurance/life assurance etc. cover though as everybody's needs and lifestyles vary so much.
 
Re: how much is to much insurance?

Do you have all the cover mentioned above?

If you have salary protection, why also have serious illness? If you become seriously ill, presumably you won't be able to work so your salary protection will kick in when your salary goes.

On life cover, it's worth checking how much death benefit comes with all your other financial products (salary protection, pension, AVC's etc.) and factor in the benefit you or your spouse will be able to collect from the state (on the basis of PRSI) in the event of being widowed - you may well find that you need less life cover than you might think to cover any shortfall.
 
Re: how much is to much insurance?

Hi Beng and welcome to AAM.

I've moved your question here as this is where we deal with your primary question concerning life assurance.

how much is to much (live) insurance? This question (or something very like it) was asked here over year ago. If i can find the post I''ll put the link here. There was a concencus that people could be over insured. Especially those who are part of an occapational pension scheme which has an element of life cover included.

ajapale
 
Re: how much is to much insurance?

to reply to oysterman the answer is yes we do have all this insurance policies.what total value life cover is normal?
 
Re: how much is to much insurance?

Sorry for delay.

There is no absolute answer. The question is what would be the net income shortfall (as outlined above) in the event of bereavement and what would be the additional expenses (childcare and housework spring to mind) in those circumstances.

But you don't need a capital sum which would provide that level of income, as life salespeople often imply - these expenses are not for an indefinite period; the expense will pass as the children grow up. Thus, much of this expenditure can be funded from capital.

On another matter, are you sure about the need for income protection and critical illness cover?
 
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