The time-consuming part is determining exactly how much insurance you might need, because life insurance is designed to fill a gap between the financial resources your family would have after you died and what they would need. To know the size of this gap, you must know how much you own, how much you owe and how much you spend.

With that information--and a little imagination--determining your insurance needs is a cinch.

Start with a copy of your household budget and a net worth statement--a simple listing of your assets and liabilities.

With those you can figure out what you are spending today and where the income comes from. You can also determine whether your demise, or the demise of your spouse, would create some long-term financial abyss. Would your death, for example, cause your family to prematurely lose a pension that's been a pivotal part of your retirement planning? (See accompanying chart.)

* * * Don't have a budget or a net worth statement? These are easy, though somewhat time-consuming, to prepare.

If you need help, any number of articles or books are available. For example, you can go to the library and read through Chapters 3 and 4 of my book, "Kathy Kristof's Complete Book of Dollars and Sense." If you bring a notebook and pertinent financial statements--your most recent mortgage statement, showing how much you owe and a 401(k) statement, showing how much you have invested, for example--you can simply follow the work sheets in these chapters and have both your budget and net worth statement completed in a few hours.

From your list of assets, consider: What tangible assets could you liquidate--that is, sell for cash--if necessary? What assets are you willing to liquidate? What current debts could be paid off with the proceeds? Are the debts bigger than the anticipated proceeds, or would the proceeds be sufficient to pay off the debts?

If your calculations include the sale of a home, be sure to estimate the home's value conservatively--especially if you think it would need to be sold quickly. Remember, though, that even in the best of circumstances, a house can't be sold overnight. At the very least, the sale will have to go through escrow, which almost always takes more than a month.

Now from your budget, consider: What expenses would evaporate if you or your spouse died? What continuing expenses would the survivor be willing and able to cut? What added expenses might you face if one of you died?

* * * Normally, you can expect that certain expenditures--food, clothing and transportation--would be likely to decline somewhat when one member of a household dies. Other expenditures would not. Chances are your rent or mortgage expenses would stay the same and that your child-care bills would go up.

As unpleasant as it may be, imagining exactly how life would change if you or your spouse died is necessary to properly estimate your insurance needs.

The question needs to be considered separately for both spouses--even if one spouse doesn't earn outside income. That's because a stay-at-home spouse is providing valuable services--such as child care, food preparation and cleaning--that the other might have to pay for in the event of a death.

The answers to these questions will help you determine how much monthly income your survivors would need if something were to happen to you in the near future.

* * * Your next step is to consider how long they'd need that income. To do that, ask yourself:

How old are my children? Are they so young that my spouse would face either a day-care or a financial crisis if he or she had to work more hours to help close the economic gap my death would leave?

Would the children's college plans be likely to be affected by my death?

How would my death affect my spouse's retirement plans?

If your spouse is not currently working, would he or she be employable today? Or would he or she be employable in the near future without job training or further education? How long would it take to make my spouse employable? How long would it take before my spouse's income could more than make up for the income he or she would lose if I die soon?