Life insurance

Life insurance is a contract between the insured, or owner, and a life insurance company. The owner pays a stipulated premium to the insurance company. If the insured dies while the policy is inforce a death benefit is paid to the beneficiary. Some policies accumulate cash value which is available by loan or upon surrender to the owner. Also, some policies have accelerated death benefits which may be available if the insured is expected to die within six months to a year.

Determining family life insurance needs
This worksheet assumes that both spouses are working and will continue to work if one partner dies prematurely. Replacing 100% of your income may be a good starting place. This should leave the survivor with the same standard of living. Some expenses go down when one partner dies but other expenses, such as childcare, usually go up.

Papers

 * Insuring America: Market, Intermediated, and Government Risk Management Since 1790 by Wright, Robert E., (November 5, 2007)
 * How Much Life Insurance Do You Need? by Glenn S. Daily (2000)
 * How and When to Purchase Low-Cost Term Life Insurance by Peter Katt (1998)
 * Human Capital, Asset Allocation, and Life Insurance by Ibbotson, Roger G., Chen, Peng, Milevsky, M.A. and Zhu, Xingnong (2005). A fuller version of this paper is also available.
 * The Adequacy of Life Insurance by Gokhale, Jagadeesh and Kotlikoff, Laurence J., (July 2002). TIAA-CREF Institute, Working Paper No. RD72
 * Life Insurance Coverage: How Much Is The Right Amount? by Claude C. Lilly, University of North Carolina at Charlotte and TIAA-CREF Institute Fellow, March 15, 2006