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Saturday, October 11, 2008 How much insurance do I need?
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Life Insurance
What can Life Insurance do?
Types of Life Insurance
Life for Anyone
Which type of insurance is right for me?
How much insurance do I need?
Why is it critical to buy life insurance now?
Sammons Financial Grp
Midland Annuity
Sammons Securities Co.
Corporate Markets

The answer to that question is not only important but also very personal. Although some general "rules of thumb" (such as 7 times a person's income) have been suggested, only an examination of your personal financial situation can determine the amount of life insurance that you should own.

To determine how much life insurance you need, you may want to seek the counsel of a qualified Midland National agent. Our representatives have a number of resources at their disposal to help determine your life insurance needs.

You may also wish to complete a Life Insurance Analysis, such as the one below.

Client and Spouse Information
Client Spouse
Gender:
Age:
Retirement Age:
First To Die:
Child Information
Number of Children:
Income Information
Income: $
Other Income (combined): $
Include Social Security as a Retirement Benefit: Yes No
Assets Information
Life Insurance Proceeds to Survivor:
Enter the total death benefit from life insurance plans (personal and group) that will be paid to the survivor at the death of the first to die.
$
Cash, Savings, CD's: $
Pension, IRA, 401(k), ESOP: $
Securities (stock, bond, mutual funds): $
Real Estate Equity:
Enter the net equity (market value minus mortgage balance) of real estate that will be liquidated upon the death of the first to die. If the property will be retained for income or is used as the primary residence, DO NOT include it in this field.
$
Other Assets:
Enter the total current value of any assets not previously listed that would not be retained. Some examples are personal property and business interests.
$
Assumed rate of return (net of inflation & taxes):
Enter an assumed rate of return on capital. Take a reasonable interest rate and subtract from it an expected long term inflation rate. This rate could be further reduced to reflect taxes, if so desired. This rate is used to figure present value of future money.
%
Expense Information
Final Expenses:
Enter the amount needed to cover probate costs, burial costs, final medical bills for the first to die, other estate administrative costs, state death taxes, and federal estate taxes. Final expenses will generally total $5,000 to $20,000 for most families. This can be calculated as a percentage of the prospect’s assets (5-7%) or a percentage of annual income (25-40% may be appropriate).
$
Debt/Loan Repayment:
Enter the sum of all outstanding account balances excluding the home mortgage or monthly rent. Include car loans, home improvement loans, credit card balances, education loans, etc.
$
Mortgage Balance/Rent Fund:
Enter the current mortgage balance on the primary residence only. For renters, calculate a home assurance fund. (Multiply the monthly rent payment by 12 to get an annual figure and then divide that by the assumed rate of return. This provides the amount of capitol required to generate enough interest to cover the monthly rent.)
$
Emergency Fund:
Enter the amount to be set aside in a reserve fund. It is recommended that 30-50% of one year’s income which for most families, would require a minimum of $10,000 to $25,000. This fund guards against unexpected events such as a job loss, a short term illness that interrupts the survivor’s income, a major home or car maintenance problem, etc.
$
Special Considerations:
Enter the amount to be used for unique expenses such as the care of dependent parents, disabled or handicapped children, or a charitable gift to a favorite church, school or organization.
$

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Midland National is a member of the Sammons Financial Group.
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