Life Insurance Needs Analysis Is An Important Step For Your Financial Planning. Even If You Sit Down With A Professional Financial Planner Or Insurance Agent, You Should Have Some Idea Of What Factors Are Used To Calculate Your Suggested Death Benefits. I Find That The More Informed That Consumers Are, The More They Were Satisfied With Their Purchase Decisions. It May Take More Conversations With Informed Clients To Actually Settle On A Deal, But Those Deals Tended To Stick. When I Worked As An Insurance Agent, One Of The Most Common Things That Clients Wanted To Know Was How Much Life Insurance They Might Need. Of Course, As An Agent, I Had To Balance An Ideal Figure Against The Cost Of The Premium. I Knew That I Needed To Offer Them Enough Life Insurance To Really Protect Their Family. But If I Suggested A Premium Rate That Would Not Fit Into Their Budget, Then They Would Either Refuse The Policy Or Cancel It Later. I Always Tried To Get Some Idea Of How Much Money The Felt Comfortable With Spending.I Did Write A Script For A Simple Life Insurance Needs Calculator. I Took Into Account A Year's Salary, Funeral Expenses, Existing Debt, And Planned Future Events Like College Tuition. Of Course, Any Financial Planning Should Include Some Emergency Money Too, So I Fitted That In. My Life Insurance Needs Estimates Were Actually Fairly Conservative, And Many Other Financial Professionals And Insurance Agents Thought I Should Double Them. Even With My Conservative Planning Formula, Many Families Were Surprised. Of Course Every Family Has Different Needs, And Any Formula Should Only Be A Starting Point For Discussion And Analysis.For Instance, Part Of A Family's Debt May The Payments On A Second Car. They Would Not Need That Car If One Spouse Passed Away So They Could Eliminate A Payment. On The Other Hand, If One Spouse Did Not Bring In Any Income, One Year's Income May Not Be Enough To Help The Family Get Back On Track. I Think The Life Insurance Needs Calculator Is A Useful Tool, And Helps Present A Graphical Image Which Many People Enjoy. However It Is Not The Only Tool, And Doesn't Replace Personal Calculations.
