What % of your householdincome are you spending on insurance?

[Horatio]

I'm currently planning for our future. I have Death, total permanent disability & poor Critical illness coverage for my family. In the event of my death (or my wifes) the payout would cover 2.5 years of expenses for my wife & son & half the mortgage.

This adds up to about 3% of our household income spent on insurance premiums. my agent has quoted a rule of thumb of between 10% to 15% as a norm.

1) Whats the opinion here on the 10-15% figure
2) I have not started planning in earnest for our retirement (we are 34) or my son education (he is 2) - any advise on the matter is appreciated.

thanks for your opinions & experiences.

 

[LDFerguson]

I think quoting a rule of thumb figure for what you "should" be paying for insurances is inappropriate. In any event, the stated 10 - 15% seems wildly high. So someone earning, say, €50,000, raising a family, paying a mortgage and trying to save for short, medium and long-term needs could afford to spend €5,000 - €7,500 per year on insurances? I'd love to meet them.

Far better, in my opinion, is to identify how much cover you actually need, by reference to your income and outgoings. Then get the most competitive policy to meet your needs. Working off cost first is the tail wagging the dog.