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How Much Life Insurance Do You Need?
Knowing your family can maintain it’s living standard if you or your spouse pass away will make you — and them — feel more secure.
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What is Life Insurance Contingency Planning For?
Decisions Too Important for Guesswork
Choosing the right life insurance is about ensuring your family and dependents have the lifetime resources they need to cover their annual spending if you or your spouse were to suddenly pass away.
Cover Every Contingency
With MaxiFi Premium and MaxiFi Pro, this feature lets you look at scenarios based on an earlier than expected death for you or your spouse/partner.
Will the survivor contribute more or less money to a retirement account?
For example, in the event of your spouse or partner's death you might want to ask:
Does the surviving partner intend to take on extra work or quit working?
Will the survivor contribute more or less money to a retirement account?
Will an expected inheritance be reduced or other non-employment sources of income stop?
Would there be any additional or reduced expenses?
How would changing needs for children be paid for?
Each of these contingencies will change the survivor's living standard needs and thus change your life insurance needs.
As a simple example let’s say you or your partner looks after your children full-time. If one of you dies and the other needs to work, then you also need to pay for childcare. With MaxiFi, you can model scenarios adding the cost of childcare over time, where, if either spouse dies in the next five years, a $0 cost to pay a nanny is changed to $2,000 per year for the next five years.
Straightforward Settings, Clear Results
MaxiFi has contingency settings built in for Special Receipts, Special Expenses, Retirement Account Contributions, Housing, and Future Earnings.
When you enter contingency changes, such as reducing a Special Expense upon the death of a spouse, the changes will impact your plan in two ways:
1
Assuming you and your partner both live to your maximum age
If you or your spouse/partner has not yet reached maximum age on the plan, contingencies take effect after that age. For example:
Jane enters a contingency to reduce a special expense of $2,000 per year to $200 per year in the event that John dies.
Their current settings have John reaching his maximum age of 100 before Jane reaches her maximum age.
The plan therefore shows the lower $200 expense for the last five years of the plan until Jane reaches her maximum age and the plan ends.
2
If you or your partner dies prematurely
Even if you both reach maximum age in the same year, MaxiFi will still account for the contingency in your life insurance calculation. For example:
Without any contingency changes, the life insurance would be based on the assumption that the survivor continues to incur the $2,000 per year special expense regardless.
But if Jane sets up a contingency where the expense is reduced to $200 in the event of John’s death, MaxiFi will account for that change.
In doing so, it may then suggest reducing their insurance coverage since the survivor will only spend the reduced amount.
MaxiFi will make recommendations based on the real-world financial situation that you and your family would be facing if the worst should happen. And when you know that you have a plan based on your own personal financial data you will be prepared for an unexpected event.