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Life Insurance recommended at zero

Submitted by brucegalvin@rev... on 6 February 2009 - 4:08pm

I have run a numbers of projections and periodically when there is not much money left for consumption I get a zero for life insurance recommendation. Is this trying to say that the inputs need to be reduced so there is enough money left over for purchase of life insurance.

I have a couple that wants to have two kids along with doing remodeling. In the first year it shows a resulting need of $500,000+ but when the first child is born the following year the life insurance recommendation is zero. Is this another way of saying the client has run out of money and needs to revise their assumptions?

I have attached the first part of the recommendation page.

Bruce

‹ Inputting Paid-Up Whole Life Policies With Cash Values so their Growth Will Be Reflected in Net Worth Problem in Main Report? ›
Submitted by Laurence Kotlikoff on 6 February 2009 - 10:14pm.
1

Hi Bruce, Not sure what you mean by running out of money? I think you should call me to discuss this at 617 834-2148. If you have specified too much in the way of off-the-top expenditures relative to your resources, the program won't be able to afford any consumption (discretionary spending). Larry

Submitted by brucegalvin@rev... on 8 February 2009 - 11:29pm.
2

I don't understand the results of the program related to life insurance recommendation when a couple is planning on having children and in the projected birth year of child there is no life insurance recommended for the main bread winner. I am missing a major point here and not sure what it is.

I have attached a PDF of the report results. If you can shed any light here I would appreciate it or I will give you a call.

Bruce

Submitted by Dan Royer (not verified) on 10 February 2009 - 12:48am.
3

Hi Bruce:

Sorry, I didn't see the PDF.

But take a look at this case study:

http://www.esplanner.com/case-account-children-when-you-buy-life-insurance

Life insurance is protecting living standard, so as living standard goes up or down in different what if scenarios, life insurance also goes up and down. See what you think after reading that case study.

Dan

Submitted by brucegalvin@rev... on 10 February 2009 - 11:56am.
4

Dan, dealing with a very similar situation. Couple want two children in the next four years. Planning says life insurance would be necessary when the children are born. The results show the opposite. Life insurance before first child is born and after that no life insurance at all. You example shows the life insurance needs dropping after birth of child because living standard goes down but the projection for couple I am working life insurance disappears.

I have attached the PDF. I hope you can read it this time.

Thanks
Bruce
(brucegalvin@revelationfp.com)

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