First, list the following:

1. All debt (mortgage, credit cards, car loans, student loans, etc.).
2. Anticipated kids’ college education needs (if in doubt, use $120,000 per child).
3. Estimated annual living expenses, multiplied by 1.33 and multiplied again by the number of years from now until the youngest child graduates from college.
4. Estimates for large one-time future expenses for which there is no savings (car purchases, weddings, major home repairs or updates, relocation expenses, educational costs for surviving spouse).
5. The annual amount of maximum contributions allowed to all retirement plans (if in doubt use $64,000). Multiply the total by the difference between age 70 and your current age. For couples, figure each spouse’s total separately.

Item five is something people often don’t think of as a need that life insurance might cover.

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