Insure Your Life!

Providing for our loved ones in the event of our death is a serious concern for most of us. The problem is that planning for such an event is not pleasant, and most of us would just as soon put off thinking about it. This project will help you determine your current and future life insurance needs.

Life insurance can be put in place to provide income for your family, educate your children, or pay off debt. Life insurance can also be used in estate planning or to benefit a cause thats important to you. Make a list of your present life insurance needs and another list of what you expect your needs to be 10 years down the road. Estimate the dollar amount for each of your needs. Use Worksheet 8.1 to determine the amount of life insurance you need now and in the future. Consider the features of different types of life insurance. Which type of life insurance would be most appropriate for you? What would the cost be to provide these amounts of life insurance? You may use the premium schedules in this chapter or obtain actual quotes from an agent or the Internet. Use these estimates to help you with your personal financial planning.

LIFE INSURANCE NEEDS ANALYSIS METHOD
Insureds Name								Date
Step 1: Estimate the total economic resources needed
1. Annual living expenses and other needs:
			Period 1		Period 2		Period 3
a.	Monthly living expenses		$		$		$
b.	Net yearly income needed (a 12)		$ -		$ -		$ -
c.	Number of years in time period
d.	Total living need per time period (b c)		$ -		$ -		$ -
TOTAL LIVING EXPENSES (add line d for each period):									$ -
2. Special needs
a.	Spouse education fund								$
b.	Childrens college fund								$
c.	Other needs								$
3. Final expenses (funeral, estate costs, etc.)									$
4. Debt liquidation
a.	House mortgage		$		$		$
b.	Other loans
c.	Total debt (4 a + 4 b)								$ -
5. Other financial needs									$
TOTAL INCOME NEEDS (add right column)									$ -
Step 2: Financial resources available after death
1. Income
			Period 1		Period 2		Period 3
a.	Annual Social Security survivor benefits		$		$
b.	Surviving spouses annual income
c.	Other annual pensions and Soc. Sec. benefits
d.	Annual income		$ -		$ -		$ -
e.	Number of years in time period		0		0		0
f.	Total period income (d e)		$ -		$ -		$ -
g. TOTAL INCOME									$ -
2.	Savings and investments								$
3.	Other life insurance								$
4.	Other resources								$
TOTAL RESOURCES AVAILABLE (1g + 2 + 3 + 4)									$ -
Step 3: Subtract available resources (Step 2) from the amount needed (Step 1)
Step 1: Total income needs									$ -
Step 2: Available resources									$ -
ADDITIONAL LIFE INSURANCE NEEDED									$ -