Note, this is not a sponsored post - just an ongoing commentary about our adventures with Life Insurance.
Before Christmas, I did an initial post on Life Insurance and my thoughts about what our needs are. At that time, I thought we would need a 500K policy on myself and $400K on Jordan.
I reached out to Glenn Cooke of Life Insurance Canada who is strongly recommended by Gail Vaz Oxlade for some help. He actually read my blog post, and challenged how I was calculating the financial loss of one of our incomes to the other.
I had worked out a 'gap' in our budget, by simply removing the income line and then making some adjustments to saving and other expense categories based on being a one person household. Glenn suggested that rather than doing that approach, follow the general rule of thumb that suggests people need to replace about 60% of their income if it's a duel income family and 80% if it's a single income household.
When I do that, and I use the calculator on his website, We need almost double - $602K for Jordan and $865K for myself based on 20 years to replace the income.
That just seems.....like sooo much money to me.
We don't have kids yet, but would like to soon - and even with kids factored in, I'm just not sure that it's the right way to approach this. Glenn talked about enough money to replace lifestyle....am I wrong in thinking that some lifestyle changes are expected if a spouse passed away?
What do you guys think?