Social Security

[Full Throttle]

This is a topic that I am way too ignorant on when it comes to life insurance planning. Client makes $85K per year and showed me his SS statement. They have three young kids and it lists the payment as $1,700/child or $3,969 total. Almost $48,000 of a $85K salary is replaced while the kids are growing up. His wife work is part time and it shows $1,900 per month for her, which is more than her current income. Is that fairly typical, at first I thought I was reading it incorrectly?

 

[DHK]

Yes, those figures are fairly typical... as long as Social Security remains solvent and benefits remain unchanged. ("The Government giveth... and the Government taketh away...")

Survivors Planner: Planning For Your Survivors

Survivors Planner: Survivors Benefits For Your Widow Or Widower

Survivors Planner: Survivors Benefits For Your Children

In short, there are three phases to survivorship benefits with social security:
1st - Caring for minor age children until they reach age 19.

2nd - the "Black Out" period between the children are ineligible for benefit and retirement social security benefits.

3rd - Retirement social security benefits kick in.


Yes, you can figure SS benefits into the HELV calculation and reduce the overall "needed" death benefit.

Even John Savage said "Hey, the government thinks enough of you to buy $250,000 of decreasing term insurance on you so you don't have to buy it yourself!"

The higher benefit that the prospect is eligible for (not including SS benefits) can be used to help pay for college expenses for children. Social Security definitely won't be there for those expenses.

 

[Norwayguy]

This is a topic that I am way too ignorant on when it comes to life insurance planning. Client makes $85K per year and showed me his SS statement. They have three young kids and it lists the payment as $1,700/child or $3,969 total. Almost $48,000 of a $85K salary is replaced while the kids are growing up. His wife work is part time and it shows $1,900 per month for her, which is more than her current income. Is that fairly typical, at first I thought I was reading it incorrectly?

There is a family max so it could end up the children's benefits will be reduced.

 

[princeskate]

If you get social security you could take the health insurance.

 

[xrac]

There is a family max so it could end up the children's benefits will be reduced.

Here is the formula for computing family max:

Formula for Family Maximum Benefit