Life Insurance Question ?

[car8788]

Hello Everybody

What is a “needs analysis”?
Do I need one to determine how much life insurance I should have?

Share your opinion here ...

[car8788]

Hello,
I am still waiting for favorable reply here ...

Needs Analysis is in direct relation to how much you owe, what your assets are, how many dependents you have, whether you're married, your income, your burial costs, your debts, etc. Basically it helps you calculate how much money your family would need should you die or become infirm.

Let's say your family depends on your income of $75,000 per year. That is a factor in your Needs Analysis.

You do not need one, but it is a helpful tool in figuring out how much money your loved ones will need to be financially secure if you are no longer alive.

I hope I explained this in terms that are easy to understand and I was able to help you.

[DeniseMancini]

Needs analysis is a procedure whereby all your assets such as other types of insurance, investments, pension, social security etc are treated as a portfolio that covers all your individual needs. In this way, your needs are examined and the life insurance that meets all these needs is calculated.
Most Insurance professionals analyze a client's needs using two basic methods, either the Income Replacement Method and the Needs Analysis Method.
With the Income Replacement Method, it is assumed that the purpose of insurance is to replace your income in case of death. Alternatively, the Needs Analysis Method assumes that the purpose of insurance is to meet family needs. In this case, the amount of insurance required to satisfy these needs might be less or more than the amount of insurance required to replace your income.

To err on the cautious side, I would suggest you use both methods and compare the results between the two to get a safe coverage amount for the policy you finally choose.

Denise at AccuQuote
Disclaimer: I work for AccuQuote and this is my personal opinion.