Life Insurance Needs Analysis
This table will demonstrate the process that is involved in determining if an individual should require additional Life Insurance.
Sample of Life Insurance Needs Analysis
| Step 1: Cash Needs | $140,000 (A) |
| Cash requirements at death: Final expense Taxes, debts, etc... |
|
| Minus | $200,000 (B) |
| Cash available at death: Stocks, bonds, etc... Life Insurance |
|
| <Excess>/Shortfall (A-B) | <$60,000> (C) |
| Step 2: Income Needs | $32,000 Annually (D) |
| Family income requirements Living expenses Education fund, etc... |
|
| Minus | $20,000 Annually (E) |
| Ongoing income sources Spouse's Income Deceased's pension Investment Income |
|
| <Excess> / Shortfall (D - E) | $12,000 Annually (F) |
| Step 3: Total Needs | |
| Capitalized value of (F) @ 5% | $240,000 (G) |
| PLUS OR MINUS | |
| (C) above | <$60,000>(C) |
| Total Life Insurance Needed | $180,000 |