How Much Do I Need?












MY LIFE INSURANCE WORKSHEET
























Income Needs



























1. Annual income your family would need if you die today (typically between 60% and 80% of total income).







Consider any lifestyle changes, and include any current expenses such as mortgage/rent, groceries, clothing, utility bills, entertainment, travel, transportation, child care, etc:
































2. Annual income available to your family from other sources









Include all salaries, dividends, interest, current (or estimated), social security benefits, property rental income, along with all other sources of income:




 




























3. Annual income to be replaced:
(subtract line 2 from line 1)

4.  Funds (Capital) needed:









(Multiply line 3 by the appropriate factor)









10 YEARS X 8.1; 15 YEARS X 11.1; 20 YEARS X 13.6; 25 YEARS X 15.6; 30 YEARS X 17.3; 35 YEARS X 18.7 and 40 YEARS X 20.0





(Enter the calculation from for the number of years that applies to you)











Expenses




























5. Funeral Expenses (average cost of an adult funeral is about $10,000):









 




























6. Administrative Expenses (also referred to as an Emergency Fund and/or Final Expenses).







This can be approximately six months or 50% of the higher wage earner’s annual salary, and can vary for cleaning up the affairs of the deceased, e.g., advisor fees, filing taxes, etc.:

 




























7. Mortgage and other outstanding debts (credit card debt, car loans, home equity loans, etc). It may make sense to pay off these debts � depending upon the survivor`s income:

 




























8. College costs**












For the years 2002-2003, the cost of a four-year education was $51,346 (public) and $109,412 (private).






Multiply this by the number of children and keep in mind that these costs are increasing more rapidly than inflation.






 




























9. Capital needed for college*.











Multiply line 8 by the appropriate years before college factor – 5 years X .82; 10 years X .68; 15 years X .56 and 20 years: X .46






Enter the calucation from above that applies to you here:








































10. Total capital required.












Add lines 4, 5, 6 and 9:










































Assets




























Keep in mind that current asset value may be considerately different at time of liquidation and the value may be significantly discounted due to a forced sale of real estate, family business or other investment.















11. Bank accounts, money market accounts, CDs, stocks, bonds, mutual funds, real estate:







 




























12. Retirement savings IRAs, 401(k)s, Keoghs, pension and profit sharing plans:








 




























13. Present amount of life insurance (including group life insurance, assuming that it will continue):







 




























14. Total income producing assets










Add lines 11, 12 and 13

15.  The Amount of  Life Insurance Needed
(Subtract Line 14 from Line 10)