How to use the life insurance tab

RightCapital is designed to provide significant insights into a client's financial landscape in order to create a space in which you, the advisor, can do financial planning just right.

The Life Insurance analysis considers the question, "What if one spouse dies 1 year from now?"

For a brief overview of the Life Insurance analysis tool watch this short video.


To access the Life Insurance analysis screen, navigate to the client and select Insurance > Life Insurance.

The Life insurance screen will work differently depending on whether there are two clients or a single client.

Overview - Joint Life Insurance

The Life Insurance screen illustrates two projections of the surviving client's income and assets in the case that one were to die a year after the current date. It also calculates the amount of insurance that would ensure the client would not run out of income in the projection and allows you to compare that to any current and proposed insurance coverage.

The Insurance projection is best used with the Cash Flow and Modified Cash Flow calculation methods (not Goal-based).

The projection includes everything that goes into the retirement projection with the following adjustments:

  • Any existing insurance that would be paid out is included
  • Any income, savings, expenses, goals associated with the deceased are removed
  • Joint expenses are reduced by 15%

Pro-tip

The joint expense assumption is a global assumption that can be adjusted from the advisor portal under the Assumptions > Misc tab.

Any insurance amount received will be assumed to be invested with the same proposed asset allocation as their other investment assets.

Summary Tab

The Summary tab allows you to compare the estimated protection need to current and proposed insurance coverage.

The protection need is calculated as the amount of insurance that, if added to the surviving client's assets at the end of the first projection year, would ensure the surviving client does not run out of money before the end of the projection.

The current insurance reflects insurance entered on the Profile / Net Worth screen that will be in force at the end of the first projection year, where the indicated client is the insured.

The proposed insurance reflects the amount entered in the 'Proposed additional life insurance' field in the action items section.

Client / Co-client Tabs

You will also see two tabs on the Insurance screen with the names of the client and co-client. The tab labeled with the client's name illustrates the scenario in which the client passes away in one year and the co-client survives; the tab labeled with the co-client's name illustrates the scenario in which the co-client passes away in one year and the client survives

The income chart reflects the projected income in retirement for each scenario shown on the Summary tab, broken down by type of income.  Any shortage is shown in red, and the total shortage is displayed to the right of the chart.  If the total of the client's current and proposed insurance exceeds the insurance need, you will see no income shortage.  This projection includes any proposed additional insurance indicated in the Action Items section.

You can also use the drop-down box to display a chart showing the surviving client's projected invested assets through retirement.  The chart displayed in green shows the projection prior to including any proposed additional insurance; the chart in blue shows the projection including the proposed additional insurance.

Only the chart from the Income tab will be included in the PDF report.

Action Items

The Action Items section displays a summary of the calculated insurance need, current and proposed insurance.

You can also use the Action Items section to illustrate the impact of changes to plan inputs on the insurance need.  You can do so by clicking the 'Edit' button at the bottom right hand corner of the Action Items section.

When you click on the 'Edit' button, you will see a screen illustrating various goals, income, expenses, savings, and strategies that you can change to see the impact on the insurance projection.  These mirror the options under the Retirement Analysis action items.

You can check off the boxes in front of any action items you wish to include to add them to the action items section, and click Save to return to the action items screen to make any changes.

For example, if you want to illustrate that a surviving spouse would no longer pay for a child's college in the event of a premature death, you can select the child's college goal:

And once you click 'Save', you will be able to adjust the college goal in either scenario to see the impact:

Note: Changes made under the Life Insurance action items only impact the insurance projection.  They do not impact the current or proposed plans in the Retirement Analysis section, or any other screen within RightCapital.

Details tab

The details tab illustrates the cash flow details associated with the projections shown on the Summary and income tabs.

The details tab functions in the same manner as the Retirement Cash Flows.  You can use the drop-down box in the upper-right hand corner to switch between the projection showing the client passing away and the projection showing the co-client passing away.

Single Life Insurance

If there is only one client, since there is no surviving client we will calculate a protection need based on specific goals and/or expenses.

The protection need will factor in any college goals, plus a monthly expense number you can indicate for a specific amount and timing.  It will also factor in how their current assets can meet those needs.  This will then be compared to their current and proposed insurance amounts.