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My Insurance Coverage
Do you know how much insurance coverage is enough?
Here's a simple exercise to determine how much you need.
Using Chart A (which shows the lump sum needed for every $1000 of income required each year), let us go through the Lim family's income protection needs.
| CHART A |
| Years to last |
Lump sum needed |
|
Years to last |
Lump sum needed |
| 10 |
$9,162 |
21 |
$17,351 |
| 11 |
$9,983 |
22 |
$18,011 |
| 12 |
$10,787 |
23 |
$18,658 |
| 13 |
$11,575 |
24 |
$19,292 |
| 14 |
$12,384 |
25 |
$19,914 |
| 15 |
$13,106 |
26 |
$20,523 |
| 16 |
$13,849 |
27 |
$21,121 |
| 17 |
$14,578 |
28 |
$21,707 |
| 18 |
$15,292 |
29 |
$22,281 |
| 19 |
$15,992 |
30 |
$22,844 |
| 20 |
$16,678 |
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Note: This chart is computed using the annuity payment method and is based on a reinvestment rate of return (inflation adjusted) of 2%.
Assuming the Lim family needs $30,000 annually and the family income protection fund should last until Bibi becomes independent at age 22:
* Assuming Wisely's current insurance coverage is $450,000
 Click here to print your results
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