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Determining Your Needs

You know you need life insurance, and that’s a great first step. But how do you know if you need $250,000, $500,000 or more in coverage? A Life Insurance Needs Analysis will help you figure it out.

Step 1

The first thing you need to do is estimate how much money your loved ones would need if you were suddenly gone and could no longer provide for them. Financial needs generally fall into the following 3 categories:

Immediate Needs: These are items that need to be paid for 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 to pay off debts such as credit cards bills, car loans and even the mortgage. 

Ongoing Needs: When you die, your family loses both you and your financial contribution to the household. Life insurance proceeds are often used as a source of replacement income, helping to pay for everyday living expenses for a period of time (e.g., 5, 10 or 15 years).  

Future Needs: Life insurance money can also be used to pre-fund future expenses such as a college education for a child or a secure retirement for a spouse.

Step 2

The next step is to add up all of the resources that are in place to meet your family’s financial needs. For instance, your spouse or partner may be an income earner. Rental income, investment income or a fixed pension benefit are other resources that might be available to your family. Also, you might already own some life insurance and hopefully you have some savings as well (e.g., bank accounts, stocks, bonds, mutual funds, CDs, etc). All of these resources will lessen your need for life insurance.

Step 3

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

Life Insurance Needed -Determine Your Needs

We make it easy for you to conduct your own Life Insurance Needs Analysis. Simply use our Life Insurance Needs Calculator. It only takes about 2 minutes to get an estimate of your needs.

For a more thorough assessment, we encourage you to call one of our licensed insurance professionals. In addition to assessing your needs, they’ll provide you with quotes and can help you begin 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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