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Bada Bing! Life Insurance Needs Ain’t So Easy to Figure Out

LIFE Foundation Releases Results of National Survey; Analyzes Life Insurance Needs of Popular TV Dads to Help Illustrate How to Determine How Much Coverage People Need

September 27, 2006 – If someone will suffer financially when you die, you need life insurance. But figuring out how much you need is not always as straightforward. When asked who needs the greatest amount of life insurance coverage, one in four Americans say that Tony Soprano needs more than other popular TV dads, Homer Simpson, Cliff Huxtable, Ray Barone, and Mike Brady. But do the experts agree?

The nonprofit Life and Health Insurance Foundation for Education (LIFE) sponsored the national survey that used fictional characters to get Americans thinking about their own life insurance needs during Life Insurance Awareness Month.

Survey Findings

Conducted by KRC Research between September 7-10, 2006, the survey asked 1,019 adult Americans to consider five television dads and select the character they believe needs the greatest amount of life insurance coverage. Here’s how the public responded:

Tony Soprano
25%

Homer Simpson
17%

Cliff Huxtable
12%

Ray Barone
12%

Mike Brady
10%

Not sure
23%

Brian Ashe, CLU, president of Brian Ashe & Associates and immediate past chairman of LIFE, says these results illustrate the fact that many Americans often make the mistake of focusing too much on the chance that they will die and need life insurance, rather than thinking about the losses their family will incur if they die.

“Determining how much life insurance you need is a factor of your family’s immediate and ongoing expenses, current assets, living situation and future plans,” says Ashe. “No matter what you do for a living, your future is unknown, so how risky your job is really has nothing to do with how much life insurance you need.”

“Working as a mob boss, Tony Soprano lives dangerously, but he’s probably one of a tiny percentage of Americans who is ‘self insured’ when it comes to life insurance,” says Ashe. “Carmela is certainly accustom to a comfortable lifestyle and his children’s college costs need to be covered, but Tony’s likely got enough money stashed away to provide for his family no matter what happens to him the future.”

According to Ashe, the other four TV dads are in much different financial situations than Tony. “Based on what we know about the other dads, they all have a pretty clear need for life insurance because they are probably not independently wealthy and all make significant financial contributions to their families.”

How Much Life Insurance Do You Need?

According to the LIFE Foundation, figuring out how much life insurance you need depends on how much money your family will need after you’re gone in order to cover immediate financial obligations, maintain their standard of living and meet future expenses, such as college tuition and retirement.

To help Americans get a handle on the various factors that go into that final figure, insurance expert Brian Ashe walks through a basic insurance needs analysis for Mike Brady of “The Brady Bunch,” the TV dad who ranked lowest in the survey.

“Having already been widowed with three young sons, Mike Brady knows firsthand why planning for the unexpected is so important,” says Ashe. “It’s really surprising that Americans ranked Mike the lowest because if there ever was someone who needed a lot of life insurance, it’s him. He’s the sole breadwinner for a family of eight and his income also supports Alice, a full-time housekeeper.”

Step 1: Estimating Immediate Expenses – “If Mike died prematurely, in addition to the funeral, lawyer fees and estate settlement costs, the Brady family would have to continue paying the mortgage on their $1 million ranch house, car loans, Alice’s salary, utility bills, credit cards and other outstanding debts,” says Ashe.

Step 2: Estimating Ongoing Income Needs – “As an architect working in Los Angeles, Mike probably earns an estimated $85,000 a year. Given the number of children, their ages and the fact that Carol doesn’t work outside the home, he would want enough life insurance to replace that missing income for at least 5 to10 years or maybe longer,” continues Ashe.

Step 3: Estimating Future Expenses – “Watching the six Brady children grow up, we know that they all attended college, in some cases graduate school, so money to fund those plans would also need to be secured. Mike also might want enough life insurance to help ensure a secure retirement for Carol,” says Ashe.

Expert Recommendation – So how much life insurance does Mike Brady need? According to Ashe, quite a bit. “Based on these assumptions, it seems clear that Mike needs at least $1 million in life insurance,” says Ashe. “That would be about 12 or 13 times his annual income in coverage, and for someone with his kind of financial circumstances, that seems about right. The truth is, he could probably use even more considering that he’s the sole breadwinner and has so many children.”

To determine how much life insurance you need to protect your loved ones, the nonprofit LIFE Foundation has a Life Insurance Needs Calculator on its website at www.life-line.org/howmuch. For a more detailed needs analysis, LIFE recommends that consumers meet with a qualified insurance professional in their community.

Biographical Profiles of the Five Characters in the Survey

Tony Soprano: A "waste management consultant," and New Jersey mob boss. Wife is a stay-at-home mom, has two young adult children. Salary estimate: $87,000 on the books

Homer Simpson: Nuclear safety inspector who lives in Springfield, small town USA. Wife is a stay-at-home mom, has three young children. Salary estimate: $58,000

Cliff Huxtable: Physician (Obstetrics/Gynecology) living in Brooklyn, NY. Wife is a lawyer. They have 5 children. Salary estimate: $264,000 (Clair’s base salary estimate: $200,000)

Ray Barone: Newsday sportswriter who lives in Lynbrook, Long Island. Wife is a stay-at-home mom, has three young children. Salary estimate: $50,000

Mike Brady: Architect who lives in Los Angeles, CA. Wife is a stay-at-home mom, has six kids total from a combined marriage and a housekeeper. Salary estimate: $85,000

*Note: All salary figures are median base pay estimates based on occupation and location, generated on Salary.com.

About LIFE
The Life and Health Insurance Foundation for Education (LIFE) was founded in 1994 in response to the public’s growing need for information and education on life, health, disability and long-term care insurance. LIFE also seeks to remind people of the important role insurance professionals perform in helping families and businesses safeguard their financial futures. To learn more about these topics, please visit www.life-line.org.

About Life Insurance Awareness Month
Life Insurance Awareness Month was created in response to growing concern about the large number of Americans who lack adequate life insurance protection. According to LIMRA International, 68 million adult Americans have no life insurance. Those who own life insurance have an average of four times their annual income in coverage, which is considerably less than most experts recommend. Held each September, Life Insurance Awareness Month is an industry-wide effort that is coordinated by the LIFE Foundation.

Contacts:
Brooke Parker
212-445-8142
-or-
Jason Adler
212-445-8245

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