On Episode 173, I discussed the three primary ways of calculating an appropriate amount of insurance:
- Human Life Value approach
- Needs Analysis approach (the best)
- 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:
- Lump Sum needs (immediate cash)
- Income needs (ongoing cash)
For the income needs, decide:
- How much?
- For how long?
- Liquidating approach or a non-liquidating approach?
Enjoy the show!
- Episode 173: http://radicalpersonalfinance.com/173-economic-basis-of-life-insurance-and-individualfamily-uses-of-life-insurance/
- Episode 101: http://radicalpersonalfinance.com/how-to-calculate-how-much-you-need-to-save-for-your-kids-college-rpf0101/
- Support Radical Personal Finance! http://radicalpersonalfinance.com/patron