Today’s show gives you the tools you need to sit down and calculate an appropriate amount of life insurance coverage for you to own.

On Episode 173, I discussed the three primary ways of calculating an appropriate amount of insurance:

  1. Human Life Value approach
  2. Needs Analysis approach (the best)
  3. Rule of Thumb approach

This show teaches you how to calculate a Needs Analysis.

The process is simple:

What You Want – What You’ve Got = What You Need

In order to figure out what you want, simply make a list of everything you want for your family in case of your death.

Divide that list into:

  1. Lump Sum needs (immediate cash)
  2. Income needs (ongoing cash)

For the income needs, decide:

  1. How much?
  2. For how long?
  3. Liquidating approach or a non-liquidating approach?

Enjoy the show!

Joshua

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