Ram Republic

To find out how much you need to invest in order generate
$1,500 a month before taxes, multiply $1,500 by 12 to find out how much you need a year—$18,000. Let’s assume that the going interest rate is 6 percent (a conservative figure, but we are trying to make you safe, and to be safe, it’s always essential to think conservatively). So we need to figure Out how much you need to invest at 6 percent to generate $18,000 a year. We divide 100 (percent of any whole) by 6 (the interest rate we’re after), which gives us almost exactly 17. Now we multiply $18,000 by 17 to see how much needs to be invested at 6 percent to generate $18,000 a year: $306,000 ($306,000 x 6% $18,360). You received a total of $600,000 in insurance proceeds, and now you know that you have to invest $306,000 for income generation for as long as you continue to bring home the $1,500 paycheck. The remaining $294,000 is what you can invest for growth—and also serves as backup if something happens to you. You have covered all your bases.
If you had decided simply to purchase the minimum amount of insurance needed in this situation, which was $300,000, you would invest all of that to generate the $1,500 a month income you need and hope you are able to keep on working while you build up more of a nest egg.
When money is an issue, though, as it is for most of us, we don’t always have the luxury of buying enough life insurance to assume the worst. With my clients there’s almost always a discrepancy between the maximum of insurance wanted and the minimum of insurance needed. Your needs, comfort level, and what you can afford all have to be taken into account. If you’re using a professional to help you figure this out, make sure he or she has your needs and pocketbook in mind and isn’t just thinking of all that the commissions will buy. I would suggest that you’re better off trying to figure out how much insurance you really need and can afford, then calling the following numbers to get quotes to compare the best-priced policies. Here are the numbers and Internet addresses of the insurance quoting services (make sure that you check with at least three of the following services; you would be surprised how much they can differ):

You’re a single parent with two kids, and you die unexpectedly. Or you’re married in a two-income household, and your spouse is killed in an accident. Whatever your own family circumstances, would those you left behind be able to carry on financially?
Back in Step 3 you compiled a list of all your expenses. Now is the time to review that list and see how much it would change if your children were suddenly parentles or if you or your partner were to die. Fixed expenses would remain the same. Some expenses would decrease. Some would increase— long-distance phone calls to friends for comfort, eating out so you wouldn’t be so lonely, entertainment. Would your child- care situation change? What about the future financial goals you had—paying for the children’s education, for example? Could you still cover that? What if you or your partner had to stop working as well? How would you cope? How much would it really take? How much do you really have?
Now compare the hypothetical money coming in against the hypothetical money going out in this scenario and any other scenarios you can imagine. What impact would a possible death have on the money coming in? If your survivors would have enough, then you do not need insurance. You may still want some for your emotional peace of mind, but you don’t need any—and there is a big difference between needing insurance and wanting it.
If they would not have enough, then you know you need insurance to protect yourself and your loved ones.

In my opinion the best age to purchase an LTC policy is around fifty-four, although it can still be a bargain at any price if you’re older. Regardless of your age, if you carry an LTC policy and do have to go into a nursing home one day, you will almost certainly pay less for all your payments combined than you would for one year in that nursing home. And many people live in nursing homes much longer. The average length of stay is 2.9 years, 8.0 years if you have Alzheimer’s. And one out of three people above the age of sixty-five will spend some time in a nursing home.
I Song-term-care premiums are based on how old you are when OU purchase the policy and are projected to stay stable at that amount for the lifetime of the policy. Let’s say you are fiftytour, in great health, and purchase a policy. I know of a wonderful policy here in California, and other states are pretty comparable, for which you’d pay $954 each year for the premium. If you had waited until you were sixty-five to buy that policy, and again are in good health, the premium would cost $2,580. Big difference. And the premiums are projected to stay Ntable for the whole time you carry the policy. (These policies arc not like car insurance policies, where they can raise my neighbor’s rates if he happens to use his policy too much but not raise mine because I’ve never filed a claim. These LTC policies can raise the rates, which they have the right to do, only if there is an across-the-board increase for all those in the same state, region, or county who have this particular plan.)
It’s also true that the younger you are, the likelier you are to he in good health. These policies are not available to those with serious health problems, or else the cost is prohibitive.