How much is enough?

Trying to settle on a life insurance policy for me (31M) and my wife (30F). Thinking about a 30 year, 1.5 million policy for each of us. PolicyGenius quoted $75.19/me, $57.65/wife per month. I think term is most likely the best route. Just looking for something simple and straightforward, at the lowest possible cost. Thought about laddering different policies and different terms and amounts, but I think having 1 policy for each of us might just be the easiest way to do it, even if it costs a little more. “Set it and forget it”. In a perfect word, we live a long and healthy life and never have to use the policy!

Background:

I’m 31 & she is 30. Both healthy with no known health issues at all. Baby # 1 is due this fall. Hope to have between 2-4 kids over the next 5-10 years. We want to have this wrapped up before baby #1 arrives.

1.5m for each of us might be overkill, but we want something to give us complete peace of mind, and cover us in case God forbid one of us were to die while we were a growing family of little ones. Something to take care of the mortgage and every expense (have to take a sabbatical from work if one of us died prematurely, daycare, help with college for kids, help with savings and retirement for the survivor, vacations, new vehicles down the road, and probably a million other things I haven’t thought of), without having to downgrade in lifestyle. I would normally think to have a lower policy on my wife, but my earnings in sales are a little less stable than hers, even though I have been making more than her over that past few years. We are also on her insurance, which is way better, and costs way less.

Is $132.84 / month for 30 years too much to spend? A year of that life insurance premium ($1595) is almost exactly what we pay each month for our mortgage, with all PMI, taxes and insurance included.

Income

Me: 90k-ish (sales, 80-100k over the last couple years. I work on commission, and there is no cap.

Wife: 80k + ~4k in yearly bonus

Debts

Mortgage – Owe 237k (bought 2 years ago at 265k. 30 year loan was 250k at 2.875%.

Car Loan – Owe 14k (bought this summer for 25k. 48 month 15k loan at 6%. Plan on paying it off in 36 months or less (paying an extra $50 per month, plus will throw an extra grand or so at the loan once or twice per year.

Take home pay / monthly expenses

Take Home pay per month is roughly 7k. $4900 (without my commission) after all taxes, retirement, and insurance are taken out. My commission check is usually around $2300/month after taxes & retirement.

Checking accounts have enough to pay for all monthly expenses at all times, plus a couple extra thousand. Extra cash usually goes to improvements around the house, or gets added to savings account.

Monthly “budget” expenses are $3800. That is all reocurring bill/subscription including mortgage, car, IRAs, utilities, phones, car insurance, subscriptions, etc. Every month I transfer 4k from our “cash” checking account into our “bills” checking account to pay for all of these reoccuring expenses.

Food, gas, and shopping aren’t factored into that budget becuase they are a variable expense. Those all get charged on our credit card, which is paid in full each month. Our credit card which is all of these plus any othe misc spending is uasually around 2k a month. I know we could cut back on eating out. That’s our only real vice lol.

Savings

Retirement

We have 250k between our 401ks & Roth IRAs. I’ve been maxing IRA since ’18, she has since ’20. 2023 will be the first time either of us max out our 401ks. Hope to continue that for as long as possible.

Misc

We have some home improvement projects we want to chip away at over the years. Complete renovation on our only full bathroom, along with adding a basement bathroom to the house. new garage roof, new windows eventually, convert an unfinished basement room to a bonus room or 4th bedroom. I have a company car which I can’t use for personal use. I’d like to replace my 20 year old beater in the next year or 2 or 3. New boiler, appliances. They all currently work fine, but they aren’t exactly new.

Is 1.5m a solid number? Is $132 /month an ok deal? It’s hard to know what to go with since everybody has different age / income / health /savings / debts / money goals…

Thanks!