Family Protection

How Much Life Insurance Do I Need?
How much protection do you and your family need? That's a difficult question because it depends on so many factors that can't be predicted - like how long you will live. A simple approach is to plan for the worst case (e.g., immediate death) and decide how much money your loved ones will need to handle such matters as:

Final expenses, including funeral costs
Debts, including mortgage
Estate taxes*
College expenses for children
Survivor living expenses

The last category is in many cases the most difficult to compute. Perhaps the best philosophy is to plan for your family to "remain in their own world" by providing them resources they will need to maintain the standard of living to which they are accustomed. An important process of financial planning is to explore the many variables and how they can affect this goal.

Number of Years to be Provided For:
If you could be sure of living a long life, this number may be small; but the purpose of life insurance is to provide a death benefit for survivors if you aren't so fortunate.

Number of Dependents, Such as Spouse and Children:
The age(s) of children also matters, as income earnings could be limited in the case of a surviving spouse who wishes to stay at home with the children until they are older.

Desired Standard of Living:
Unless you want your spouse and children to face a decline in their accustomed standard of living, it is wise to consider the impact of inflation and plan accordingly.

* The federal estate tax exemption amount is $3,500,000 in 2009. The highest federal estate tax rate is 45% in 2009. The federal estate tax will be repealed on 1/1/10 until 12/31/10. Beginning 2011, the federal estate tax will be reinstated with a federal estate tax exemption amount of $1,000,000 and a maximum estate tax rate of 55%. Congress continues to discuss and consider legislation that, if passed, could change the estate tax exemption and estate tax rates for 2010 and beyond.

Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Insurance products are issued by Pacific Life Insurance Company in all states except New York, and in New York by Pacific Life & Annuity Company. Product availability and features may vary by state. Each company is solely responsible for the financial obligations accruing under the products it issues, and its product and rider guarantees are backed by that company’s financial strength and claims-paying ability.

For more information on this subject, and professional guidance in selecting the right kind and amount of insurance coverage, contact your insurance professional.

This material is not intended to be used, nor can it be used by any taxpayer, for the purpose of avoiding U.S. federal, state or local tax penalties. This material is written to support the promotion or marketing of the transaction(s) or matter(s) addressed by this material. Pacific Life & Annuity Company, its distributors and their respective representatives do not provide tax, accounting or legal advice. Any taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.

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