Magazine article The CPA Journal

The Survivor Income Planning System (SIPS)

Magazine article The CPA Journal

The Survivor Income Planning System (SIPS)

Article excerpt

THE SURVIVOR INCOME PLANNING

SYSTEM (SIPS)

Price Waterhouse's latest personal financial product is an inexpensive, easyto-use interactive software program designed to help an individual determine, in the event of his premature death, whether his family would be left financially secure or whether there would be a gap that could be closed with life insurance.

Basic Data Required

The initial screen requests personal information: age, marital status, ages of children and other dependents, and smoker vs. nonsmoker status.

Additional screens are provided in order to assess goals, such as funding children's education, and to determine if resources and economic assumptions are adequate. The program asks for information regarding annual income for self and spouse, current value of investment assets, and value of existing life insurance. With this information, the and program can determine if survivor's income and spending goals can be met for current and later years. If not, the program will compute the additional life insurance needed to cover the gap. Additional insurance required is based on an estimate of the cost of a one-year guaranteed renewable term policy based on age and gender and whether the person smokes. …

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