Say, Mr. Lim, 35 years of age, $ 100k earns annually. He is married with a 3 year old son. Should he dies, he wants his family for the next 25 years before his death due to an annual revenue of $ 60k with payments.His greatest debt outstanding with $ 250k, including your home mortgage. His wife is also working with her pay home mortgages will be able to serve.
Statement of net worth
Property
1. House Market Value 500k = $
2. Equity and Unit Trust $ 50 =
3. Bank deposit = 10k $
4. Existing life insurance $ 100k =
5. Employees Provident Fund (EPF) $ 200k =
6. Group insurance death benefit = $ 30k
Total assets 890k = $
Liabilities
1. Outstanding home mortgage 250k = $
Calculation
Money to develop a conservative projection of 5% per year, a little inflation outpacing.
The present value of annual income
PMT 60k = $ i = 5%, n = 25 years, PV =?
Current value $ 888k (good number!)
Son, the present value of the cost of education
FV = 150k $ i = 5%, n = 15 years, PV =?
Current price $ 72.152k
Total liabilities $ = (250k + 888k + 72.152k) = 1210k dollars (that's 1.2 million).
Decrease of $ 320k = $ (890k 1210k) is. The need for additional insurance coverage is a rough figure.
It is prudent to note that the reduction could be because it is less than:
1. Existing investments and bank deposits earn compound interest over the years if his wife well in their portfolio management can be after he is gone.
2. Their EPF funds and life insurance policies are seen as the sole beneficiary is his wife, the lump sum can be invested to earn compound interest.
3. We all know that real estate assets worth over the years to appreciate!
I'm sure that when you first started working and bought his first insurance, my agent just asked you how much premium you can afford to pay per month, and then he will quote you the coverage accordingly. An insurance agent came before me and offered such information. Well, then, with all that are interested I may not be on time, plus, when you are not married, yet is up to you.
I am also looking for some insurance policy.Please give me more information about it.
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