One of the common ways to determine how much Life Insurance is enough is through the acronym C.I.M.E.R.
Cash “ Needed to clean up your affairs;
Income – Replacing your income with a Lump Sum that can be used up to produce the same level of income at say 5% after tax and costs;
Mortgage – Straight forward, pay out your debts to take the pressure off;
Education – May well be covered in Income above;
Retirement – How much of your income in your later working years would have gone towards building up your funds to retire on?
Often the period you expect to support children has a big bearing on the above.
Also you then can deduct from the above Lump Sum as calculated any ‘realisable assets’, such as Super, so as to bring the total required down.
Cheers, and if you know of a family member or friend we can assist, please don’t hesitate to share with them.
Dave Dyson
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