Life Insurance Needs Analysis
When buying life insurance, you need to find out how much money your loved ones will need when you pass away. The basic way to analyze this is by finding:
1. Present
How much money your family will need right away when you die to pay for immediate debts. These are known as final expenses and will cover:
- your funeral
- any medical bills
- your mortgage
- any outstanding debt
- school
- and settling your estate if required.
2. Future
How much money your family will need in the future to continue their lifestyle and household? This is usually referred to income replacement.