Well, the answer isn’t really how much life insurance you need… it’s how much investment capital your family will need at the time of your death. Their need for capital — on a gross basis — is really a function of two variables:

1. How much will be needed at death to meet immediate obligations?

2. How much future income is needed to sustain the household?

The first category is fairly easy to estimate. It’s the sum of final expenses (including uncovered medical costs, funeral expenses and final estate-settlement costs) and other lump-sum obligations (such as outstanding debts, mortgage balance, and college costs).
The second category is a bit trickier. It involves calculating the “present value” of future needed cash-flow streams. By answering a few simple questions below, you can get a rough sense of the needs for capital that might exist at your death.

Below, please estimate some of the lump-sum needs that would exist at the time of your death.

Final expenses: Typically the greater of $15,000 or 4% of your estate. This would include uncovered medical costs, funeral expenses, and final estate settlement costs. Note: If your estate is over $1,500,000 your final expenses may be much higher due to federal and state estate or inheritance taxes.

College funding: Total projected college costs (tuition plus all other costs such as room and board, books, etc.), less current funds in the child’s name.
Savings and investments: Includes bank accounts, money market accounts, mutual funds, CDs, bonds, stocks and other assets.
Mortgage payment fund: Whether or not your survivors would use life insurance proceeds to pay off the mortgage right away, creating a fund to cover mortgage payments makes sense.
Annual income needs: Total amount your family needs, before taxes, to maintain their current standard of living, typically 60%-75% of total income. Families with higher incomes typically fall into the lower end of that range.
Retirement savings: Includes 401(k), Keoghs, pension and profit sharing plans.
Life insurance in force: Includes individual policies, group term coverage available through work, and any other life insurance on your life payable to your family or for the benefit of your family. Do not include accidental death insurance or “double indemnity” insurance.

Spouse’s marginal tax rate: This is the rate of tax you are paying on your highest dollars of income. For instance, in 2005 a single taxpayer earning $50,000 has a Marginal Tax Rate of 25%. That’s because earned income between $29,700 and $71,949 gets taxed at 25%. The lowest Marginal Tax Rate is 10% an applies to people who earn less than $7,299. The highest Marginal Tax Rate is 35% for dollars earned in excess of $326,450.

]]> http://www.integrainsurance.org/2011/11/how-much-life-insurance-do-you-need/feed/ 0 http://www.integrainsurance.org/2011/10/integra-insurance/ http://www.integrainsurance.org/2011/10/integra-insurance/#comments Fri, 28 Oct 2011 22:00:22 +0000 Chicago Insurance http://www.integrainsurance.org/?p=68 I would like to take this time to introduce myself; my name is Stan J. Nowak. I am a Business Insurance Specialist. My organization’s focus is selling 401K, Employee Benefits, Estate Planning, Long Term Care, Buy Sell Agreements, Health, Life, Disability insurance. The business insurance you choose plays a key role in the growth of your organization.
* Long Term Care covers not only skilled care services – when recovering from an illness or ...]]> Chicago Insurance & Financial Services: Integra

I would like to take this time to introduce myself; my name is Stan J. Nowak. I am a Business Insurance Specialist. My organization’s focus is selling 401K, Employee Benefits, Estate Planning, Long Term Care, Buy Sell Agreements, Health, Life, Disability insurance. The business insurance you choose plays a key role in the growth of your organization.

* Long Term Care covers not only skilled care services – when recovering from an illness or injury, but also personal care services – helps maintain the activities and functions of daily life
* Disability Insurance helps you replace part of lost income while you are actively employed when you are disabled. The coverage ends at age 65 or upon retirement.
* Buy-Sell Agreement is an agreement between owners to buy out a deceased owner’s share of the business in the event of the co-owner’s retirement, disability or death.
* 401 (K) plans allow employees to set aside a portion of their salary for retirement. The employee is not taxed on this income until withdrawals, and the employer’s cost is a tax-deductible business expense.
* Estate or Succession Planning is the process by which an individual or family arranges the transfer of assets in anticipation of death. An estate plan aims to preserve the maximum amount of wealth possible for the intended beneficiaries and flexibility for the individual prior to death. A major concern for drafters of estate plans is federal and state tax law.

A main concern with business package today is lack of understanding. This is where we can properly consult you concerning the risk of your business. Business owners do not realize the value of effective consultation in your benefits. The reason is the barrier of effective communication. Communicating simply and clearly is a key factor for proper risk consultation. A key point when choosing business benefits broker is that they are professional and knowledgeable in their field. Also, trust and relationship building is a must between our clients and us. Integra Insurance is in partnership with your business and protecting your risks is our sole purpose. We communicate delicate areas of exposure to the client.

My company, Integra Insurance and Financial Services, specializes in business insurance. We have 15 years of experience in the insurance field. We represent top-notch carriers i.e. Guardian, Securian, American General, Blue Cross, Humana, AAA, Progressive, Safeco, …I feel this will be an invaluable asset to your organization. Allow us to access your risk and match proper plans to your needs.

By bringing together Chicago’s  most trusted  in one place, we make it easy for you to determine exactly what you need in a health insurance policy and direct you to the insurers who offer the closest matches at the most affordable prices. Then, with your best options laid out in front of you, comparing the finer points of each policy is a cinch. Finding the right Chicago health insurance has never been easier.

Integra Insurance and Financial Services, Inc.
6020 W. Higgins Ave, Suite A, Chicago IL 60630
Tel (773)774-5750 Fax (773)774-5950