Dave Says: How Many Years?

Dear Dave,

My husband and I are debt-free. We are in our mid-20s. We also have a full emergency fund and we each have 401(k) plans with our employers. Currently, we are looking at life insurance. We do not plan on having children, so what length term policies would you suggest for a couple in our situation?

— Ashlie

Dear Ashlie,

I’d recommend you both find good 15- or 20-year, level term policies, with coverage amounts of 10 to 12 times your individual incomes. If you two have a change of heart and decide you want kids later, I’d recommend converting those to 30-year term policies, still at 10 to 12 times your incomes. Why? You’d want the insurance to be there to protect everyone in the family until the kids are out on their own.

Between now and then, and in the years after, your continued saving and wealth building will lead you to a place where you guys are self-insured. And that’s a great place to be!

— Dave