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Determining Your Needs

You’re aware you need life insurance, which is great, because that is the first step. But how do you know how much you’ll need? A Life Insurance Needs Analysis will help you figure it out.

Step 1

The first thing that needs to be done to complete a life insurance needs analysis is an estimation of how much money your loved ones would need in the event you were no longer there to support them. Financial needs generally group into three categories:

Immediate Needs: These are costs that must be taken care of right away, such as funeral expenses, estate settlement costs, and medical bills that weren’t covered by insurance. Life insurance proceeds can also be used towards debts, such as credit cards, car loans, and even mortgages.

Ongoing Needs: When you die, not only does your family lose you, but they also lose your financial contributions to the household. Life insurance proceeds can be used as a supplement or replacement of income, which would help cover everyday living expenses for a period of time.

Future Needs: Life insurance proceeds can also go towards pre-funding future expenses, such as a college education for a child or a secure retirement for a spouse.

Step 2

The next step in an life insurance needs analysis is to review all resources available to meet your family’s financial needs. For example, your spouse may be an income earner. Rental income, investment income, or a fixed pension benefit are other financial resources that can be utilized. Savings can also be utilized (e.g. bank accounts, stocks, bonds, mutual funds, CDs, etc.). All of these financial resources will lessen your need for life insurance.

Step 3

The difference between your family’s financial needs and the resources available to meet those needs is your need for life insurance (see equation below).

Life Insurance Needed -Determine Your Needs

We make it simple to conduct your own Life Insurance Needs analysis. Just use our Life Insurance Needs Calculator. It only takes a few minutes to get an estimate of your financial needs.

For a more detailed assessment of determing your needs for life insurance, we recommend calling one of our licensed insurance professionals. They will provide you with quotes and can help the process of applying for coverage.

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Life insurance policies described, quoted, shown and illustrated throughout this website are not available in all states and may include those issued by: Allianz Life Insurance Company of North America, Minneapolis, MN and Allianz Life Insurance Company of NY, New York, NY are both members of Allianz Insurance Group, Minneapolis, MN; American General Life Insurance Company, Houston, TX; The United States Life Insurance Company in the City of New York, New York, NY, member companies of American General Life Companies; Assurity Life Insurance Company, Lincoln, NE; Aviva Accordia Life is a subsidiary of Global Atlantic Financial Group, West Des Moines, IA; Aviva Life and Annuity Company of New York, Melville, NY; American National Insurance Company, Galveston, TX; AXA Equitable Life Insurance Company (New York,NY); Banner Life Insurance Company is a subsidiary of Legal & General Group, Plc, London, UK; Legal & General America, Frederick, MD; Banner Life Insurance Company, Urbana, MD; William Penn Life Insurance Company of New York, Garden City, NY; Equitable Life and Casualty Insurance Company, Salt Lake City, UT; Fidelity Life Association, A Legal Reserve Life Insurance Company, Oak Brook, IL; First Central National Life Insurance Company, New York, NY and Household Life Insurance Company, Detroit, MI, member companies of HSBC Insurance; Genworth Life and Annuity Insurance Company, Richmond, VA and Genworth Life Insurance Company of New York, New York, NY, only Genworth Life Insurance Company of New York is admitted in and conducts business in New York, member companies of Genworth Financial, Inc.; Gerber Life Insurance Company, White Plains, NY; Great West Life and Annuity Insurance Company, White Plains, NY; Integrity Life Insurance Company, Cincinnati, OH and National Integrity Life Insurance Company, Goshen, NY are both members of Western & Southern Financial Group, Cincinnati, OH; John Hancock, Boston, MA; Liberty Mutual Insurance, Boston, MA; Lincoln Life & Annuity Insurance Company of New York, Syracuse, NY and The Lincoln National Life Insurance Company, Fort Wayne, IN, both insurance company affiliates of Lincoln National Corporation, whose marketing name is Lincoln Financial Group; MassMutual Life Insurance Company, Springfield, MA; First MetLife Investors Insurance Company, New York, NY, MetLife Investors USA Insurance Company, Irvine, CA and Metropolitan Life Insurance Company, New York, NY, all three members of the MetLife family; North American Company Life & Health, Chicago, IL and North American Company Life & Health of NY, Garden City, NY are both members of Sammons Financial Group, Chicago, IL; Principal Life Insurance Company, Des Moines, IA; Protective Life and Annuity, Birmingham, AL; Minnesota Life, St. Paul, MN; Pruco Life Insurance Company, Newark, NJ and Pruco Life Insurance Company of New Jersey, Newark, NJ, member companies of Prudential Financial, Inc., Newark, NJ; Prudential Financial, Newark, NJ; ReliaStar Life Insurance Company, Minneapolis, MN, ReliaStar Life Insurance Company of New York, Woodbury, NY and Security Life of Denver Insurance Company, Denver, CO, member of the ING VOYA family of companies; Securian Life Insurance Company, St. Paul MN; Symetra Life Insurance Company, Belluvue, WA; Transamerica Life Insurance Company, Cedar Rapids, IA; First Symetra National Life Insurance Company of New York, New York, NY; Vantis Life Insurance Company, Windsor, CT.


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