No gap at your goal
No gap: the life insurance and savings in place already cover this goal, with $901,678 to spare.
Bill's $500,000 term policy ends in about 3 years. Today there is no gap; if this happened 5 years from now there would still be no gap.
No gap: the life insurance and savings in place already cover this goal, with $358,714 to spare.
When an adult dies, the income they earned and the work they did at home stop. The household's costs and plans don't.
How much money the household would need if one of you died, to meet the goal you chose.
How families protect against this. Life insurance protects the people who depend on you, and the income and work at home you provide. It turns a loss no family could save for into a set monthly cost, so the home, your family's plans and daily life can continue.
If one of you died, what should the household's resources do?
We include enough to bring savings up to your emergency-fund goal.
Bill's take-home of $10,000 a month would stop. The household's income would drop from $10,000 to $0 a month.
Spending would stay about $9,000 a month. The debts would not be paid off, so their payments would continue until each loan ends.
The household would be short at first ($9,000 a month). After $20,000 of final costs, the $1,600,000 of life insurance and $135,000 of savings in place would cover that for the whole 3 years.
Your goal: Support the household until the youngest child is 24 (3 years).
In place today: $1,600,000 of life insurance and $135,000 of cash and investments.
| + Bill's take-home pay that would stop: $10,000 a month for 3 years — the lump sum needed today to replace it | $353,121 |
| − Mortgage payment that ends when it is paid off: $5,000 a month for 3 years (the years of support you chose; the loan has 15 years left) | $173,166 |
| − Other debts payment that ends when it is paid off: $1,000 a month for 3 years (the years of support you chose; the loan has 4 years 2 months left*) | $34,633 |
| + Mortgage paid off | $600,000 |
| + Other debts paid off | $50,000 |
| + Final costs | $20,000 |
| = What full protection would take | $815,322 |
| − Life insurance in place today (including $100,000 through work) | $1,600,000 |
| − Savings in place: $35,000 of cash, less $18,000 kept as the emergency fund, plus $100,000 of investments | $117,000 |
| = Left over (more than enough) | $901,678 |
These amounts are what you'd need today, all at once. We assume the lost pay would have grown 2% a year, and that the money set aside earns 4% a year while it's paid out. A loan payment is only counted until that loan would have been paid off. We don't count retirement accounts or home equity.
* We estimated the years left on this loan from its balance and payment, leaving out interest. That makes the loan look a little shorter and the amount needed a little higher — so we err on the safe side.
Life insurance through work is counted. It usually ends when the job ends, and it is not counted from age 65.
The death benefit counted from Bill's permanent life policy ($500,000) assumes its long-term care benefits were not used. If its long-term care benefits are used, the policy usually pays less when you die.
Bill's $500,000 term life insurance ends in about 3 years. After that it won't help cover this.
Bill's $500,000 term life insurance ends in about 20 years. After that it won't help cover this, so the gap grows.
No gap: the life insurance and savings in place already cover this goal, with $901,678 to spare.
This pays off the mortgage, as you chose. If you kept the mortgage and kept making the payments instead, there would be no gap.
There is no gap to close.
| If it happened… | The gap then |
|---|---|
| Today | $0 — no gap |
| In 5 years | $0 — no gap |
| In 10 years | $0 — no gap |
| In 15 years (when Bill would be 70) | $0 — no gap |
These figures include future price rises. We assume costs go up 3% a year and savings keep up with prices, with nothing added. Each debt is paid down by its own payments until the loan ends. Paid household help stops when it's no longer needed. Life insurance through work stops counting at 65.
If Bill died: what the family would need vs what is in place
Judy has no paycheck, so no pay would stop: $10,000 a month would keep coming in.
Spending would stay about $9,000 a month. The debts would not be paid off, so their payments would continue until each loan ends. The household would also pay $1,500 a month for the household help Judy provides.
The household would be short at first ($500 a month). After $20,000 of final costs, the $1,000,000 of life insurance and $135,000 of savings in place would cover that for the whole 3 years.
Your goal: Support the household until the youngest child is 24 (3 years).
In place today: $1,000,000 of life insurance and $135,000 of cash and investments.
| + Mortgage paid off | $600,000 |
| + Other debts paid off | $50,000 |
| + Paying for the household help Judy provides ($1,500 a month for 5 years, as a lump sum needed today) | $88,286 |
| + Final costs | $20,000 |
| = What full protection would take | $758,286 |
| − Life insurance in place today | $1,000,000 |
| − Savings in place: $35,000 of cash, less $18,000 kept as the emergency fund, plus $100,000 of investments | $117,000 |
| = Left over (more than enough) | $358,714 |
These amounts are what you'd need today, all at once. Paid household help is counted rising 3% a year. We don't count retirement accounts or home equity.
The death benefit counted from Judy's permanent life policy ($500,000) assumes its long-term care benefits were not used. If its long-term care benefits are used, the policy usually pays less when you die.
Judy's $500,000 term life insurance ends in about 20 years. After that it won't help cover this, so the gap grows.
No gap: the life insurance and savings in place already cover this goal, with $358,714 to spare.
This pays off the mortgage, as you chose. If you kept the mortgage and kept making the payments instead, there would be no gap.
There is no gap to close.
| If it happened… | The gap then |
|---|---|
| Today | $0 — no gap |
| In 5 years | $0 — no gap |
| In 10 years | $0 — no gap |
| In 15 years (when Bill and Judy would be 70) | $0 — no gap |
These figures include future price rises. We assume costs go up 3% a year and savings keep up with prices, with nothing added. Each debt is paid down by its own payments until the loan ends. Paid household help stops when it's no longer needed. Life insurance through work stops counting at 65.
If Judy died: what the family would need vs what is in place
Each one shows how your result would change if something were different. They are not advice about what you should do.
Try your own what-if
If Bill died 10 years from now
What's in place would cover it — no gap.
This would make your result more accurate.
Improve this result