The young family has some very unique risk factors that should be reviewed for life insurance needs, should the income stop for the family. Life insurance can help with the replacement of that lost income for the family or debt responsibilities. Life insurance is a contract for a future delivery of funds to meet a possible future risk that you feel is beyond the scope of your resources to properly deal with. It has often been said that those depended on you may pay many times more for the cost of caring for their financial needs should they be left behind after your death to face those financial needs alone. For most the cost of proper life insurance would be far less costly. These elements should be reviewed for each spouse in relation to the possible risks presented by the loss for each.
Lump sum needs Monthly Needs for _____years
- The home mortgage amount _________________ ________________
- Auto loans _________________ ________________
- Student School loans _________________ ________________
- Special needs child _________________ ________________
- Needs for aging parents _________________ ________________
- Continuing Ed requirements _________________ ________________
- Credit Card Debt _________________ ________________
- Installment Debt _________________ ________________
- Family or personal loans unpaid _________________ ________________
- Funds for Children's College _________________ ________________
- Business or hobby debt _________________ ________________
- Tax benefit loss _________________ ________________
- Adjustment time for spouse/children _________________ ________________
- Subtract any currently owned life insurance_________________ ________________
- Employer provided life insurance is not always there since people today change jobs often and employers change benefits; thus, this should not be included as part of the family protection coverage.
- Funds to cover possible estate taxes _________________ ________________
- For the business owner, funds to cover business continuation options_________________ ________________
Total needed lump sum for your risk ___________________ Total Sum monthly___________
For Item 13 we usually ask for twice the take home pay of the possible person lost to the family. The total of these items should give a family the amount necessary to cover the risks at any given time. Since people have life changes, the economy change, as do other things, it is necessary, at times, to review the above needs and the life insurance purchased to meet these needs, to keep the protection on track.