Survivor Needs Analysis
Final Expenses & Funeral Costs - An estimate would typically be the greater of $10,000 or 4% of your total estate. This would include uncovered medical costs, funeral expenses, and final estate settlement costs.
The cost of funeral and final expenses has never been greater than it is today. The national average, according to the National Funeral Directors Association (as of July 2004), is $6,500. And many people spend significantly more.
Your Outstanding Mortgage / Other Debt - There are 2 classifications of debt used in this analysis; 1) the mortgage on your home; and 2) all other outstanding debts such as credit cards, automobile loan, etc. If they are to be liquidated (paid) at your death, enter the current outstanding amounts.
Educational Needs - Total projected college costs (tuition plus all other costs such as room and board, books, etc.), less the amount of any funds currently held in the child's name. How much would you have to have invested today to meet future educational costs as they occur?
Monthly Income to Your Survivors – Enter how much income per month would you like your beneficiary to receive.
Years Income is to be provided – Enter how long you would like your beneficiary to receive income.
Current Investments including Retirement Assets - Includes savings, investments, 401(k) and other retirement funds. These assets would be available to meet the income needs of your survivors. Amounts paid out from tax-qualified plans (IRAs, 401(k), etc) would also be subject to income tax. These taxes are not considered in this analysis.
Current Life Insurance Protection- Include all 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, "double indemnity" insurance, or death benefits under a Second-To-Die policy.
After – Tax Return on Investments - The investment return is assumed to be an after-tax rate of return. The lower the rate of return, the more conservative the analysis. The higher the rate of return, the more aggressive the analysis.
Inflation Rate - Reasonable inflation rates could range from 2.5% to 4%. If you want to be more conservative in your overall plan, use a higher inflation rate. To be more aggressive (lower the impact of inflation), use a lower inflation rate.