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Certain resources - such as Individual Retirement Accounts (IRAs), 401(k) accounts, and home equity - should not be subtracted, because they have other intended purposes. Additional considerations include the following: Other resources, including investments, bank accounts, and group or other life insurance benefits can be subtracted from the tentative capitalization. The brief example of a $5,000 monthly budget shortfall suggests a procedure for transforming current living requirements into a lump sum capitalization of the amount required to meet long-term survivors' needs. There are many more potential uses for life insurance, but common in their consideration is the following question: How much do we need? The proceeds might provide for a surviving family's ongoing lifestyle needs, equalize legacies to those family members who are not participants in a family-owned business, facilitate a business partnership; Which is a student's alma matter. Once it is confirmed that life insurance is an appropriate solution, life insurance proceeds to replace lost opportunity is a simple concept: In exchange for premiums budgeted and paid over a lifetime (however short or long it proves to be), cash resources are delivered by the insurance company to the designated beneficiary at the time they are needed the most.

The need to reduce or eliminate debt (including the possibility of eliminating the home mortgage); provide for college educations; and provide for any special needs of children, surviving spouse, or elderly parents should be taken into account. Social Security will provide a benefit for children under the age of 16 and should be taken into account. Other income resources - such as the surviving spouse's anticipated income - can offset the capitalization only if the "need" wasn't based on considerations above and beyond current resources.