When purchasing life insurance, the question really isn’t how much clients need, but how much capital their family will need at the time of their death, which depends on two variables:

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1) How much will be needed at death to meet immediate obligations?

This amount takes into account all final expenses: uncovered medical bills, funeral and estate-settling costs, outstanding debts, mortgage balance and college costs to name a few.

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2) How much future income is needed to sustain the household?

This is the number they’ll arrive at after calculating the “present value” of cash-flow streams their family will need after their death.