Familyman77
Registered User
- Messages
- 157
We were overpaying a lot over the last few years which averaged between 1500 - 2000 per monthHow much were you paying each month on the mortgage?
Liam, thanks for the detailed reply. Like you said there we also want to have a little extra aside now to do the small things we would have looked over the past few years. We want to see some merit from the overpayingVery quick look at it...
Cost of running household is around €4,000 per month net. In the event of your death, this needs to be replaced, less an allowance for the fact that the household will cost less to run without you in it. State Widow's Pension would pay roughly €1,000 per month. So life cover to replace €3,000 per month for 18 - 20 years to see your younger child out the gap. A couple of ways of doing this: €3,000 x 12 x 18 = €648,000, less €375,000 existing cover = a requirement for around €273,000 additional life cover.
Or ... the existing €375,000 would stretch over 18 years to around €1,700 per month. You can buy a life insurance policy that would pay your spouse an additional €1,300 per month until 2044 in the event of your death, instead of a lump sum. This is cheaper than a lump sum policy.
The financial cost of paying to replace the work of a stay-at-home spouse in the event of their death is harder to quantify. Royal London had a stab at it here. You could make an estimate and apply the same logic as above to the calculations.
Is there an Income Protection scheme at your place of work? If not, Income Protection is important, especially so for a single-income household.
After that, use the balance of the former mortgage repayment to build the savings back up, then think about increasing pension contributions. But don't forget to leave a little aside for having fun now!
Regards,
Liam
www.FergA.com
Yes I think so. Someone of your age is something like ten times more likely to develop a life-limiting disability than to drop dead over the next 20 years.1. As single earner should I be looking at income protection or a more comprehensive life insurance
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