Life Insurance Protection Worksheet

How much is enough?

This three-part worksheet will help you figure out how much Life Insurance will be needed at death.

	First Applicant	Second Applicant
Part 1 - Liabilities and Cash Needs Insurance
How much is owing on the mortgage(s)?
How much do you owe in other loans and debts?
How much will the final expenses be (burial, taxes, probate lawyer fees etc.)?
How much money is needed to finish children's education? (multiply the yearly expense by the remaining years of education for each child. e.g. 7,000 x 4 years x 2 children=$56,000)
Do you have dependents that require special care? If so, how much and for how long (use the same method as above)?
Do you have any other cash needs (bequests, emergency fund, etc.)?
Total liabilities and cash needs
Part 2 - Amount of money needed to provide income
Total annual income needed by family/partner
Partner's annual employment income
Annual CPP/QPP survivor/orphan income benefits
Gross annual income available
Annual income shortage/surplus
Assumed rate of return (adjust for inflation, if desired)
Amount of money needed to meet income shortage
Total amount of money required
Part 3 - Assets (usable by family / partner)
Your cash assets (savings, GICs, saving bonds etc.)
Retirement savings plans $ that would be considered a rollover
Mutual funds, stocks and bonds
How much is the principal worth
Other real estate
Total life insurance (group, personal, mortgage and/or credit)
Business/ farm assets
CPP/QPP death benefit
Other assets (e.g. pension plan death benefit)
Total amount available
Totals
Total Assets
Total Liabilities
Surplus / Shortfall

 
 

Single Income Family Income Objectives

Based on a government study*, the following are typical objectives to permit a family to "maintain their standard of living" after the death of an income earner. The assumption is that the mortgage and residence is paid or that rent has been established and that education expenses are provided for separately.

A government study has found that two-income households outspend their one-earner counterparts. Therefore, if both spouses are presently working, 70% of their total gross income should be provided regardless of income level.
 
 

Annual Gross Income	% of Gross Income Required
up to $44,000	70%
$44,001 - $49,000	66%
$49,001 - $54,000	63%
$54,001 - $60,000	60%
Over $60,000	57%
* Source: 1960 bureau of Labor Statistic Consumer Expenditures Survey Updated with Bureau of Labor Statistic Price Index through August 1995, and converted to Canadian dollar values using Statistics Canada purchasing power parity data (1994).

 
 

Income Objective Table

Money required to provide levels of annual/monthly income at various interest rates (simple interest):
 
 

Annual Income $	Monthly Income $	4%	6%	8%	10%
12,000	1,000	300,000	200,000	150,000	120,000
15,000	1,250	375,000	250,000	187,000	150,000
18,000	1,500	450,000	300,000	225,000	180,000
21,000	1,750	525,000	350,000	262,500	210,000
24,000	2,000	600,000	400,000	300,000	240,000
27,000	2,250	675,000	450,000	337,500	270,000
30,000	2,500	750,000	500,000	375,000	300,000
33,000	2,275	825,000	550,000	412,500	330,000
36,000	3,000	900,000	600,000	450,000	360,000
39,000	3,250	975,000	650,000	486,500	390,000
42,000	3,500	1,050,000	700,000	487,500	420,000
45,000	3,750	1,125,000	750,000	525,000	450,000
48,000	4,000	1,200,000	800,000	562,500	480,000
51,000	4,250	1,250,000	850,000	600,000	510,000
54,000	4,500	1,350,000	900,000	637,500	540,000
57,000	4,750	1,425,000	950,000	712,500	570,000
60,000	5,000	1,500,000	1,000,000	750,000	600,000
Note: The lower interest rates are used if a person wishes to include an offset for inflation: e.g. 8% interest, 4% use 4% interest rate.

 
The above information is for illustration purposes only and cannot be construed as offers to provide life insurance. Fiscal Agents is not in the business of marketing life insurance products, please consult with a life insurance distributor, as each individual circumstances differ.