Life insurance analysis, which is sometimes referred to as life insurance needs analysis or the needs approach, is a method that is used in order to determine just how much life insurance you need to leave for the loved ones whom you’ve left behind. This is done in order that they may live comfortably. There are a lot of different factors that you need to take into consideration whenever you’re using the needs approach instead of something like trust owned life insurance. Of course, all of this information can be found within an adv brochure but you need to know what to look for nonetheless.
One of the first things that life insurance analysis needs to take into consideration are your final expenses. These include both your funeral and your burial costs. The minimum amount here should be $7,000.
After you’ve been buried, life must still go on. This is something that the life insurance analysis understands quite well. As such, the life insurance analysis takes the following things into consideration:
1. Your dependents must be taken into consideration. Young children will need to be taken care of financially. You should also include college tuition for each child.
2. If you’re leaving a spouse behind, they’ll be faced with a drastic reduction in income. This should be taken into consideration. Even if your spouse didn’t bring any income into your household, there may now be the need to pay for childcare.
4. Any unpaid debt must also be factored into the equation. This includes things like mortgages, automobile loans and credit card debt.
5. If you’re single and have pets, you’ll want to think about what might happen to them if you were to die. If a relative agrees to take care of them, you should still think about how much it will cost to take care of them for the remainder of their natural lives. Things like veterinary care and food can be expensive.