INSURANCE WORKSHEET (Continued)
STEP 5
Family’s Monthly Income
STEP 6
Family’s Monthly Living Expenses
Rent Payment .........................................................$_________________ Mortgage Payment ................................................$_________________ Electricity/Gas Payment.........................................$_________________ Telephone Payment ...............................................$_________________ Food ........................................................................$_________________ Clothing ..................................................................$_________________ Entertainment ........................................................$_________________ Transportation . ......................................................$_________________ Loan Payments (Explain) For: _____________________..................................$_________________ For: _____________________..................................$_________________ For: _____________________..................................$_________________ Other Expenses (Explain) For: ______________________................................$_________________ For: ______________________................................$_________________ For: ______________________................................$_________________ For: ______________________................................$_________________ For: ______________________................................$_________________ Total Monthly Expenses For Family. .....................$_________________
Surviving Spouse’s Salary.................................$_________________ Survivor Benefit Plan Payments ......................$_________________ DIC Payments ....................................................$_________________ VA Pension .......................................................$_________________ VA Benefits (Explain) For: ______________________. .........................$_________________ For: ______________________. .........................$_________________ For: ______________________. .........................$_________________ Social Security Benefits: For Spouse: ...................................................$_________________ For Children: .................................................$_________________ For Parents: ..................................................$_________________ Other Income (Explain) From: _____________________.........................$_________________ From: _____________________.........................$_________________ From: _____________________.........................$_________________ From: _____________________.........................$_________________ From: ______________________.......................$_________________ Total Monthly Income For Family . ..................$_________________
STEP 7
Reconciliation of Family’s Monthly Expenses Versus Monthly Income
STEP 7
If the “Income minus Expenses” computation indicates that your family’s monthly income (after your death) is enough to cover their anticipated monthly expenses, your immediate concern regarding their financial security should be at ease. While it appears they will be provided for, they should have an income “cushion” to guard them against emergencies, inflation, disasters, and the death of other family members. On the other hand, if the computation shows that your survivors will not have enough monthly income to cover their expenses, it is time to take immediate action to preclude this from happening. The quickest and least expensive way to accomplish this is to immediately increase your insurance.
Total Monthly Income For Family (from Step 5 above) ............................................$_________________ Total Monthly Expenses For Family (from Step 6 above) ............................................$_________________ Excess Income Available or Shortage (if there’s a shortage, show the amount in brackets) . .........................................$_________________
STEP 8
Determining How Much Insurance You Need
STEP 8
As your income level increases and you are able to place more money into sound investments which provide you the financial security you seek, your insurance needs might very well decline. But until you reach that “safety net,” it is better to be safe than sorry. At the end of this chapter, we outlined a few different methods of determining how much insurance you need. After reviewing the income and expenses your survivors would incur, it might be prudent to reread this section of the chapter and take another look at your requirements.
After the above computations, you might find yourself in the fortunate position of having enough insurance to satisfy your present financial needs, as well as the needs of your survivors after you are gone. By the same token, you might have determined that the amount of life insurance protection you are presently carrying will be insufficient to provide your family with the financial protection they will need and deserve.
Notes, Comments & Points to Check
CHAPTER 13: LIFE INSURANCE
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