TermSmart

How Much Life Insurance Do You Need?
	Step 1: Net after tax monthly income needed by the survivors. (This amount should be in addition to any other sources of income such as social security or employer provided benefits.)
	Step 2: Number of years the above income will need to continue.
	Step 3: Estimate the average annual intertest rate that you can earn on the invested life proceeds before income taxes.
	Step 4: Estimate the average annual inflation rate. (Historical rates for last 10 to 20 years indicate an inflation rate of 3% to 6% for long term projections)
	Step 5: Estimate the average tax rate that will be applied to your investment earnings over the period of the income stream.
	Step 6: Lump sum amounts needed for final expenses. (Some experts estimate this to be 4% of your net worth.)	$
	Step 7: Total amount of any debts you want to liquidate at death. (You can include your mortgage here, or allow for its payment in your monthly income needs listed in step #1)	$
	Step 8: Estimate the total cost for any college or technical schools that your children may need to attend.	$
	Step 9: Total residual amount you want left over at the end of the payout period. (Our calculations will automatically adjust this amount to reflect losses in spending power caused by increases in inflation.)	$

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