How-To Determine the  Amount of Insurance That I Need 
By Bill Swinehart

Statistics from The Fraternal Insurance Counselor’s guide state that the one-parent family is the fastest growing segment of the U.S. population.  In 1980, the number of one-parent families headed by a male totaled 1.7 million.  In a decade and a half, this figure almost doubled to more than 3 million by 1995.  In 1980, there were 8.7 million one-parent families headed by a female.  By 1995, this number had grown to more than 12 million.  Statistically, one-parent households have, on the average, three children under the age of 18. 

By way of comparison, the traditional two-parent family grew by less than 7 percent during the 1980s.  In 1980, there were 49 million two-parent households and in 1995, there were over 53 million. 

The one-parent family has all the financial security needs as the traditional two-parent family.  However, these needs are extremely compelling since the loss of one parent could mean the end of the family as a social unit.  In our situations, it is of critical importance to fill both income and security needs. 

So, as single parents, there are still some very fundamental questions that we can easily answer ourselves.  Who do we love and care about?  What’s important to us, for them and for us?  What do we want? 

The following table can help us answer those questions.  Rate the importance of the goals and objectives below from very high to very low.  Put in a dollar amount that you feel will adequately provide for that need.  This exercise should be done very subjectively and from your heart.  You can consult your wallet later. 

Note:  Do not factor in inflation, interest rates, Social Security and other variables.  This is a snapshot of today’s needs based on your current age and the current ages of your dependants.

Importance of Goals for Life Insurance

The other consideration for life insurance is the type.  Simply stated there two kinds of life insurance, 1.) Term, (which expires at predefined periods), and 2.) Permanent, which accumulates cash value.   

Through this exercise you have simplified computing your Financial Security Profile (FSP).  You should now have a better idea of what is important to you and the amount of insurance to adequately fill the need. 

Again, this was a subjective exercise that involves your heart rather than your wallet.   There are many other complex methods to compute your human life value.  But you have just done it on a personal scale as opposed to an objective scale based on numbers and statistics.  It’s the way to start planning and building your financial future and securing the future of those you love.    

Bill is District Representative for Modern Woodmen of America and can be reached at 919-368-3563 or bswhart@bellsouth.net.  Their website is at www.modern-woodmen.org.