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THE NATIONS' CAPITAL; The value of a human life

VISTA, Calif. -- What is a human life worth to a family?

The answer depends on one's roles as a current provider of financial
support and a beloved person who offers physical and emotional support.
This issue comes to light when someone dies.

In families with young children, the death of a parent can mean losing the
only living income. Sometimes the family also loses their home because some
tribes only provide housing to adult tribal members.

According to the U.S. Department of Agriculture, it costs from $354 to
$1,096 a month to raise a child. This includes fair market rent, food,
transportation, clothing and miscellaneous personal care, entertainment,
sports equipment, etc. Child care and health insurance cost $54 to $207
extra, but this is excluded because of tribal education and IHS programs.

In order to adequately plan for an untimely event, it is important to look
at three factors:

How will living expenses change?

What about the long-term plans, such as college education for the children,
vacations or second homes?

What money is available to make up for the income loss or support from the
other spouse?

These calculations vary from family to family. Here is an example:

In a family where dad, age 35, is an enrolled member working at a
managerial position, he could bring in well over $50,000 a year from his
job, plus another $36,000 from per capita. Mom, also age 35, works part
time in the administration, but is not enrolled. So her income is only
$20,000 a year. There are children age 10, 7 and 4. Together they live on
dad's reservation, which provides housing for adult members. They enjoy a
good lifestyle, owning two SUVs and going on two vacations a year.

The family has minimal savings. Dad has $3,000 in his employer's retirement
plan and mom has $600. The tribe established the minors' trust two years
ago. Each child now has $72,000 set aside. The couple encouraged the
children to be college-bound and talked about this nest egg as their
college fund.

One day, when the family went a ball game, they got into a bad accident. A
parent was killed.

If mom had been the victim, dad would have to take over her chores of
shopping, cooking, washing and cleaning. In addition, the children still
need help with their homework and transportation to extra-curricular
activities. There is no down time. He is exhausted.

Money cannot replace mom. If the couple had life insurance coverage, mom's
policy could provide money to pay for domestic help and replace the money
she brought into the household. The hired help would provide respite time
for dad.

The cost of federal minimum wage and payroll taxes for a part-time
housekeeper is approximately $8,900 today. Mom had earned $20,000 for the
family. Take away the $700 a month she spent for the car and gas, wardrobe,
haircuts and personal care. Until the youngest child is raised, adjusted
for 3.5 percent inflation, mom would have contributed $366,000 to the
family over the next 14 years.

Even after the children are grown, mom might continue working and
homemaking for dad. For the next 30 years, this value would have been worth
$702,000.

In this situation, the family could consider two life insurance policies to
replace mom's financial contribution: one for $366,000 to cover the
children while they are growing up and a separate policy $702,000 for dad.

If dad had been the victim of the accident, the family could plunge into a
serious financial crisis. They would have lost not only dad's $50,000
paycheck, but also his $36,000 in per capita income. Additionally, they
would have lost their home because they are no longer eligible to live in
tribal housing.

Under this scenario, the family's income needs are as follows: dad's
paycheck and per capita income were $86,000 a year. Take away $700 a month
for dad's work and personal expenses (car payments, work related costs of
gas, wardrobe, haircut and personal care). Since mom and the children
cannot live in tribal housing anymore, add back the fair market rental
value of a similar home at $1,200 a month. Altogether, dad's contribution
to the household was $92,000 a year.

In order to adequately provide for the children, mom can petition the
tribal council for release of the minors' trust funds. If tribal council
approves a monthly partial release from the minors' trust, this can help
the family until the children reach age 18. However, there is no guarantee
with per capita distributions. The amounts taken out will reduce each
child's total nest egg and can seriously reduce the amount of money
available for college and other education.

Let's assume that the tribe agrees to release $1,200 monthly for each
child. The family still has $4,000 less in income. Mom can seek full-time
work, but she will only be able to earn an extra $1,000 because of her job
experience. After the children are raised, there will be no further
financial assistance to her. All in all, her lifestyle will be reduced
substantially.

If dad had wanted to provide mom with a similar lifestyle, he should
consider providing an equivalent of $4,000 a month until mom reaches age
65, but make sure to adjust for 3.5 percent inflation. Since life insurance
proceeds are exempt from income taxes, this could mean $2 million of life
insurance coverage.

A human life is priceless. In these scenarios, the family begins with an
existing budget that transcends one person's death. In many ways, tribal
members are fortunate because of their culture in caregiving, especially in
times of need. However, each family must consider its own financial
circumstances and take action to secure their survivors' future against
tragedies such as this.

The opinions expressed are those of Cynthia Tam as of 10/31/2005 and are
subject to change based on market and other conditions.