a contract between an insurance policy holder and an insurer or assurer, where the insurer promises to pay a designated beneficiary a sum of money (the benefit) in exchange for a premium, upon the death of an insured person (often the policy holder).
The calculations contained within this calculator are specific to Royal Neighbors of America. It is intended to estimate an amount of life insurance coverage if death occurred in the near future. It is not a recommendation for specific coverage amounts. Your financial needs may differ from the estimates. Royal Neighbors does not guarantee that the amount illustrated here will meet your financial needs. You are responsible for selecting the appropriate amount of coverage. To evaluate your specific needs, please contact Royal Neighbors directly at (866) 845-6665.
| Year | Partner Age | Partner Income | S.S. Income | Available Income | Desired Income | Surplus/Shortfall | Available Resources | Insurance Needed |
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Calculations include your answers to the previous questions, in addition to the following: 3% investment return; 2.6% anticipated inflation rate; $8,500 for funeral expenses which is based on the national median cost for an adult funeral in 2014 according to the National Funeral Directors Association1; 75% of your annual combined income for desired annual income needs; and 15 years for the number of years’ income needed or the calculation of the number of years it will take your youngest child to complete higher education, whichever is greater. Social Security benefits were factored based on the age of your youngest children (up to 4). Immediate needs include your mortgage, other debts, and $8,500 for funeral expenses.
College cost estimates are based on the following parameters (based on data provided by [College Board] . The inflation rate for college costs (5.48% annually) is based on the Bureau of Labor and Statistics Consumer Pricing Index average from January 1996-June 2016. This rate will factor into college cost assumptions for future years, adjusted annually.
1 “The national median cost of a funeral with viewing and burial for calendar year 2014 was $7,181. If a vault is included, something that is typically required by a cemetery, the median cost is $8,508. The cost does not take into account cemetery, monument or marker costs or miscellaneous cash-advance charges, such as for flowers or an obituary.” http://www.nfda.org/news/statistics
