Life Insurance Needs Analysis

Determine whether you need life insurance, how much coverage is appropriate, and what type makes sense for your situation.

17 action items~15 min to complete4 sections

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❓

Do You Need Life Insurance?

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Identify who depends financially on your income (spouse, children, aging parents)Key

Confirm whether your employer provides group life insurance and its coverage amount

Assess whether your surviving dependents could maintain their lifestyle without your incomeWatch out

Consider life insurance needs even for a non-income-earning spouseAction

Review life changes annuallyAction

Evaluate business succession planningKey

💰

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Calculate income replacement need: annual income × 10–15 years of support neededKey

Add outstanding mortgage balance to coverage needs

Add estimated education costs for dependent children

Add final expenses: funeral, medical, and estate settlement costs (~$15–25K)

Subtract liquid assets your family could use: savings, existing policies, investmentsKey

Account for inflation in coverageWatch out

Factor in spousal income and benefitsKey

📋

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Choose term life insurance for pure income replacement — it is almost always the right choiceKey

Select the right term length based on your youngest dependent's financial independence ageAction

Only consider whole life or universal life if you've maxed all tax-advantaged accounts firstWatch out

Level term (fixed premium throughout) is almost always preferable to renewable term

✅

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Get quotes from at least 3 insurers — pricing varies significantly for identical coverageAction

Apply while you're young and healthy — premiums are locked at applicationKey

Prepare for the underwriting process: medical exam, health history, lifestyle questionsWatch out

Name and confirm beneficiaries carefully — primary and contingent

Disclose all health information honestlyWatch out

Lock in rates before health changesAction