How much life insurance should you have?
Striking a balance between having too little and too much insurance coverage can be confusing, but a few simple calculations should simplify your decision.

1.  Determine how much your family needs to continue living the way it does now. Add:

• Living expenses, such as food, clothes, rent or mortgage, taxes, utilities, entertainment.
• Anticipated child care if one parent dies.
• Total $__________________

2. Add the income that you expect your household to maintain:

• Income of surviving spouse.
• Social Security benefits.
• Total $___________________

3. Subtract #2 from #1 to identify any income shortfall: $___________________
 
4.  Determine your family's debts and expenses. Add:

• Outstanding debts, such as car loans, credit card balances, etc.
• Expenses for funeral and burial.
• Any medical expenses not covered by insurance.
• Children's college fund
• Total $___________________

5. Multiply income shortfall (#3) by ten years: $___________________
 
6.  Add #4 and #5 to determine your total of current and future expenses: $_____________
 
7.  Identify sources of other income for your family members. Add:

• Existing life insurance.
• Assets that produce income, such as rental properties, stocks, and bonds.
• Cash and savings accounts
• Social Security benefits (onetime standard benefit of $255).
• Total: $___________________

8. Subtract #7 from #6 to determine your insurance need. 
 

For Further Information

Laura Albrecht works for KVI, a division of Seabury & Smith, ASME's Group Insurance Provider. For more info on life insurance plans and features, call Seabury & Smith at (800) 289-2763 or (202) 457-7717.