2006 Edition, Vol.2    

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Got Kids? Make Sure You Get Enough Life Insurance.

Believe it or not, it now costs approximately $750,000 to raise a child from birth to college. It therefore goes without saying that parents should have life insurance - but how much?

Quick Estimate: Multiply your current annual salary by 8. For example, if you make 50,000/per year then you should buy a minimum term life policy of $400,000.

To more accurately estimate your coverage needs, use the following worksheet:

1. Estimate your dependent’s annual living expenses:
(i.e. food, clothing, utilities and other necessities)

* Do not include mortgage payments and other loans.
2. List sources of income:
Spouse’s income $
Investment income $
Social Security $
Pension $
Other income $
Total Income $
3. Subtract line 2 from line 1 to estimate the additional income needed each year: $
4a. Estimate the number of years this income will be necessary $
4b. and multiply it by your answer on line 3: $
5. List all your outstanding loan balances, including credit cards and mortgage, and calculate future college costs: $
6. Add lines 4b and 5 for an estimate of your life insurance needs: