Today’s show gives you the tools you need to sit down and calculate an appropriate amount of life insurance coverage for you to own.
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!
Joshua
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Joshua J. Sheats, MSFS, is the world's leading authority on integrating lifestyle goals and money goals without conflict. He teaches normal people how to seamlessly connect the science of financial planning with the joy of goal achievement.
Joshua is dedicated to helping normal people achieve financial freedom by merging creative (and crazy) ideas from the world of personal finance with the academic integrity of formal financial planning. He simplifies complex money topics and makes boring financial mumbo-jumbo less boring.
