Term life insurance: Sum insured

Good day,

the term life insurance is generally to be considered as survivor protection. The insured person does not really have an advantage from this insurance, as the policy only pays out upon their death. I think it is advantageous to set the amount higher than the actual loan. That way, the family still has some financial leeway in an emergency. This is one of the rare cases where overinsurance actually makes sense. To be able to extend the insurance coverage, a free adjustment of the benefit should be agreed upon in the contract. This makes particular sense when the insured person gets married or has a child. The need for protection increases significantly in these cases.

I see it a bit differently.
I prefer to put the money for overinsurance into repayment or special repayment and reduce the loan amount. In an emergency, more will be left for the surviving dependent to live on.

I think you can't make a general rule about it.
If the surviving dependent works themselves and can support themselves + child(ren) in case of emergency, then I don't need to insure this financial leeway. If the partner has no chance of finding a job in the labor market to cover living expenses, then of course it is necessary.

I find that too general. In the event of death, you simply can't just look at income; maybe if you have children alone, you can't work as much as when you are two, or the care would be much more expensive. I have insured "myself" for about €17 per month (with a decreasing rate corresponding to the credit limit), which covers the entire mortgage and thus protects my spouse. As additional repayment, it is not that much either, but that's just a personal attitude.

What should come out of this is actually that it always has to be looked at individually. To say categorically that you must insure more than that for the mortgage is just as pointless as saying it’s enough if the partner goes to work. Of course, you are also right ( ), but that is again only half the truth.

In summary, I have to agree with Musketier: if the partner’s income is enough to live on even in the worst case, including the contingencies that Saruss mentioned, then I don’t have to "overinsure" at all costs, but can also put the money into repayment, even if it is perhaps only 20 € more per month. If that, of course, is not possible, then the further support of the surviving family members should also be considered, that is clear. And if both partners are able to keep the house alone in the event of the death of one of them, then I also don’t have to insure the entire mortgage.

Accordingly, there are simply different approaches that should be considered and based on which one must then decide how to insure oneself.