Determining How Much Supplemental Life Insurance You Need
Some worksheets to help you decide. Do not construe this as financial advice.

Now that the Trust offers portability of supplemental life insurance, it's even more critical to assess your needs while you can take advantage of this benefit. The insurance you elect now could protect your family during your retirement, or until you find other employment.

To determine your needs, now, and for the future, the best place to start is by knowing your finances. Do you have a yearly budget? If not, complete this worksheet to develop a sense of your financial picture, now, and when your income will be reduced in the future (retirement or layoff).

By comparing your income and planned expenses before and after your income is reduced, you can see what what you can afford for a premium, and what would be needed to protect your family when you die.

Step 1: Your Income - Add up your current total family income from all sources. Include Unemployment Compensation as well as income from other family members if it is used for family expenses. Use the take-home amount, or what you actually have to spend after deductions.

• Earnings from employed family members


• Unemployment Compensation


• Tips or commissions


• Interest or dividends


• PERS, STRS or Social Security


• Child support or alimony


• Public assistance


• Veterans benefits

List your income now and what it will be once reduced on worksheet #1.

Step 2: Your Monthly Expenses - If you had a budget before your income was reduced, you probably know how much you were spending for monthly expenses. If not, use old records, canceled checks, bills, and receipts to figure out how much you spent on the following categories.

• Housing - mortgage or rent payments, property taxes


• Utilities - electricity, gas, oil, phone, water, cable TV


• Food - groceries, eating out, school lunches


• Transportation - gas, car repairs and maintenance, parking, bus, taxi fares


• Medical Care - doctor, dentist, clinic, hospital, medicine, glasses


• Credit Payments - car payments, installment loans, credit cards, charge accounts


• Insurance - health, life, property, car, disability


• Household Operations and Maintenance - repairs, cleaning supplies, paper supplies, towels, equipment


• Retirement - contributions to deferred comp, IRAs or other retirement accounts (remember to subtract this expense in the "adjusted" column)


• Clothing and Personal Care - new clothing purchases, laundry, dry cleaning, hair care, cosmetics, toiletries


• Education and Recreation - books, magazines, newspapers, lessons, tuition, hobbies, club dues, sports, pet expenses, entertainment, vacation, alcohol, tobacco


• Miscellaneous - child care, gifts, contributions, personal allowances, child support

Remember, not all your expenses are monthly. Property taxes, insurance premiums, and holiday gifts come once or twice a year. It’s easy to forget about them and then not have the money to pay for them. Worksheet 2 can help you identify and anticipate these expenses. You will need to set aside some money in your monthly spending plan to meet these occasional costs.

Step 3: Balance Income And Expenses - Add up your adjusted expenses and compare the total to your current income.

Worksheet 1: Monthly Spending Plan

*Because most bills are monthly, it’s easiest to look at income and expenses on a monthly basis.

Multiply weekly income by 4.33 and bi-weekly income by 2.17 to convert them to monthly amounts.

As you think about what your family and try to plan how much you really need, ask yourself these questions:

• Which expenses are essential to your family’s well-being?


• Which expenses have the highest priority?


• Which areas can you reduce to keep your spending within your income?


• How much can you afford to spend in each category?

Return to Calculating your life insurance needs. You may want to review worksheet 2 or read more about portability.

Supplemental life insurance is available to you through the Union-led Benefits Trust.