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Life insurance and Family Structure
Human Life value Technique
amt of LI to purchased is the PV of the family's share of the deceased breadwinner's future earnings. usually says you need more than necessary. used in court
Salary multiplier approach
LI amt is multiply your income times 10. not good because everyone has different needs
Capital retention approach
luxury approach. purchase enough LI so the income generated from invested LI proceeds plus other income will produce a desired income level in perpetuity EX endowment technique
T-acct; determine LI needs by determining financial needs if breadwinner dies compared to financial needs to existing financial resources and purchase LI for the difference.
before the blackout period
time when you stop getting benefits to the time you get SS and other benefits
Financial planning process
1) gather info 2) establish objectives 3) analyze info 4) develop a plan (write will) 5) implement plan 6)monitor and take corrective action
die w/o will
if on life support... tells when to unplug you
riskier but higher returns
lower return but safe
legal; reducing tax liability; ex: donation
death, taxes, incapacity, laundry list.. who gets what