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Assess Your Aviation Life Insurance Needs

Calculating exactly how much coverage you need as a pilot can be frustrating. When you're alive and healthy, you may feel you are paying for too much life insurance. On the other hand, have you ever heard a widow or widower say they had carried too much life insurance on their departed spouse?

Below is a formula to help you in assessing your aviation life insurance needs:

INCOME REPLACEMENT

Total annual household earned income: $
(ex. 50000)
Less annual earned income of surviving spouse after death of insured: $ ( )
Preliminary income shortage to family members: $
Less any unearned annual income to family:
(Such as trust funds, dividend income or financial help from parents)		 $ ( )
Total annual income shortage: $
Divide by assumed rate of return on investments:
(Remember your family will now live off the investment income so adjust your rate of return to fit their risk tolerance)		 %
(ex. 9 for 9%)
Amount needed for INCOME REPLACEMENT to family: $

CASH FUND NEED

Immediate cash needs:
(Bills that will have to be paid after death. Examples include; funeral/burial expenses, medical and hospital bills, attorney’s fees and estate taxes.)		 $

Mortgage:
(What would it take to pay off your mortgage today?)
OR
Rent payment fund:
(What amount is necessary to provide for five years of rent payments? Monthly rent $ X 60 months)

 $
Debt Liquidation:
(Total amount of current debt you wish to pay off)		 $
Children educational fund:
(Amount of money set aside specifically to provide for the college education of your children:
Annual college cost $ X number years of College X number of children )		 $

Child/Home care fund:
(A “rainy day fund” set aside to pay for the new expenses of child and/or home care created by the death of the spouse now performing these duties.)

 $
Any additional money you wish to provide (optional): $
Total CASH FUND NEEDS: $
Add Income Replacement and Cash Fund need for
TOTAL LIFE INSURANCE NEEDS:		 $
Less lump sum money available after death of spouse:
(such as IRA's, 401K's, employer sponsored group term insurance, and savings accounts)		 $ ( )

NEW LIFE INSURANCE NEEDED:

$

 

  
 


Aviation Life Insurance
Portland, OR 97202
888.465.5228  |  Fax: 503.233.0084
jim@lifeinsuranceforpilots.com

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