I'm pleased to present the winter 2006 online edition of Perspective, PEMCO's customer newsletter. Thank you for subscribing. We've now issued three online editions, and I'm glad you find this e-mail version useful and convenient. As always, feel free to share Perspective with your friends, and watch for the spring issue coming out in May. I welcome your feedback about Perspective. Simply send your comments to perspective@pemco.com.

Jon Osterberg
Perspective editor

Simple formula calculates life-insurance needs

How can you buy enough life insurance to take care of your dependents without going “insurance poor?” One sure way is to avoid those popular rule-of-thumb methods like multiplying your annual salary by seven!

A better (but still simple) formula looks like this:

Short-term debts include final expenses (uninsured medical, funeral, and probate costs), outstanding debts (credit cards, auto loans), and emergency reserves (home or car repairs). Think 12 to 36 months’ worth.

Long-term debts include mortgage and college expenses.

Maintenance means ongoing necessities like food, clothing, utilities, and transportation. Calculate this figure for one year, then multiply it by the number of years you want to provide this income.

Resources include the survivor's likely income or retirement benefits, employer-provided life insurance, Social Security benefits, and savings or investments that you may cash in to pay extra expenses.

Life insurance needs. You may initially arrive at what seems like an astronomical figure – but don't panic. For most people, that just means reworking the equation and seeing what could give a little.

For help, call a PEMCO Life Insurance Co. specialist at 1-800-GO-PEMCO (1-800-467-3626). With no obligation, he or she will work through a needs analysis with you to find the amount and type of coverage that’s right for you.