Life Insurance Capital Needs Analysis
We realize there are so many different ways to arrive at the amount of life insurance coverage you should have. From basic "rules of thumb" like having 10x your income to the more complex "human life value" calculations that come from LEAP, Circle of Wealth or whatever. None of these are bad, but they all approach the problem a bit differently. One old tried and true methodology that's been around for years, is to use what's called the life insurance capital needs analysis. Basically, this strategy has you inventory expenses, income, and a host of other relevant financial data to mathematically arrive at the "right number". It's not the end all, be all stratgey per se but it does work and it will get you a bit closer to something concrete than simple platitudes spit out by talking heads in the financial media. We hope you find it helpful!
Life Insurance Capital Needs Analysis
- 3. The life insurance pros over at the insurance pro blog would like to remind you that this is merely a tool to be used that will help you more accurately approximate the amount of life insurance coverage (face amount) you or your client might need today. Please keep in mind that you should do a separate calculation for each spouse or partner in a relationship as income levels and needs are different. Also, please be aware that you will need to take into account the effects of inflation which in turn will cause the amount of insurance you need to rise significantly over time. In other words, this is not a static calculation that you do once in your lifetime. For an in depth analysis from a qualified insurance agent, contact us at the salus agency