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On life insurance, you might as well start your ladder now by grabbing a couple mil 20 term policy for each of you - it only gets more expensive the older you are.
In terms of ultimate coverage needs, you have a lot of unknowns that will start to crystalize as kids come and a home is purchased and there’s really not a one size fits all answer. Best way to start gauging your insurance needs is to have a hard think about what would happen if you kicked the bucket tomorrow - what would your spouse and kids need to maintain some sense of normalcy, what are the big expenses in the future they will need help with, and what assets do you have today that offset these needs?
For our personal situation (3 kids under 5, single income household, 25 years left on the mortgage, mid 30s), I carry enough term on my life that their lives could go on with out anything really needing to financially change - which equates to enough term to give my wife a NW of ~50x my current cash income when the term proceeds are added to our existing assets. It’s an overly conservative coverage cushion but it helps me sleep better.
Worth noting that’s it’s ~50x of today’s cash comp but I’m in the early phase of a significant ramp in cash comp (making partner this year at my firm) so after the initial partnership ramp up years if would be more in the 10-15x range.
Chose to insure the future earnings at a younger and healthier age - term policies are very cheap for what they offer if you’re young and healthy.
F
What about long term care insurance?
Subject Expert
Usually a bad deal these days, unfortunately.
Subject Expert
You do want term life insurance and disability insurance. Think carefully about how much you need. Sometimes people buy too much or too little.
I'd max out whatever your employer offers for LTD insurance. That's probably going to be the cheapest coverage available. Individual LTD policies are portable have a lot more flexibility than group disability policies, but at a cost. If you are both making $250k/year, how devastating would it be to have one of you lose income due to LTD? That's what you have to weigh vs. the cost of the premiums. Statistics show there is about a 1 in 4 chance that a young adult will become disabled before retirement age. What lifestyle do you want to maintain if one of you becomes disabled? We can't answer that for you, but that will determine your coverage needs. Also, what do you have saved for retirement? Any brokerage? Other assets? If one of you dies early, can the remaining spouse do what they want to on their own income? Too many unknowns to give you a real answer.