How much $ life insurance needed to cover shorfall @ 4% interest?

Question

Our total family living expenses are $63,000. Honey is dying and the family income will be $55,000.

Answer 1

Someone who is dying can not obtain a new life insurance policy. You have to be healthy at the time you procure insurance. A general rule of thumb for coverage is ten years salary as a minimum. Plus, you add any special expenses- like cost of child care, paying off medical and funeral expenses, etc. If Honey has any health insurance from work, see if you can keep that going by paying the premiums if she must leave her job.

Answer 2

You need to have 80k put into a well managed mutual fund that earns 10% a year. This will cover the shortfall each and every month. Look to get 100k to help with inflation. you may have a hard time finding a company that will cover your honey due to the terminal illness and if you do find one you'll pay alot in premiums.

Answer 3

I hope what you are really asking is if there is sufficient life insurance in place.

If you have a shortfall of $8,000 and need to earn that much in interest at 4%, you would need $200,000.  It's simple math:

You divide the shortfall amount ($8,000) by the expected return (4%) so 8,000/4%=200,000.