Budgets and Money

Life Insurance Detailed Needs Analysis

A good way to determine how much life insurance you may need is a Detailed Needs Analysis exercise that factors in your needs and obligations, and takes into account the value of your liquid assets. 

Get The Right Amount of Coverage with a Life Insurance DNA

A survey conducted by the Life Insurance Management and Research Association (LIMRA) and the non-profit Life Happens, indicates that nearly 30 percent of Americans believe that their life insurance needs aren't being met and agree that they need more life insurance coverage. However, when it comes to calculating how much life insurance they need, four in 10 are confused as to how much they need or what type of life insurance policy to buy.1 So what's the best way to calculate how much life insurance you may need and how do you ensure that you aren't underestimating your coverage? With a detailed needs analysis or DNA.

A detailed needs analysis

If you were to die tomorrow, your life insurance could provide the people who depend on you the most for financial support with enough cash to pay support their current standard of living. If you don't have enough coverage, your loved ones may suffer financial hardship. Thankfully, there is an easy way to estimate how much life insurance you may need. Enter the detailed needs analysis (DNA).

A DNA is a simple way to gauge how much life insurance you may need. It works by carefully considering your individual needs and obligations, as well as your current assets. It can provide you with a calculated snapshot of how much life insurance you may need so that if you weren't here tomorrow, your family would have the money for both short and long-term needs. That's putting cash into their pockets for immediate costs that include final expenses and medical bills, as well as money for ongoing needs such as food, clothing, and housing. A DNA test considers a variety of factors such as:

  • Age of your spouse and children

    to help you estimate how many years of income replacement your loved ones may need if you were to die.

  • Mortgage and other debts

    so that your family can settle outstanding debts such as a house payment, vehicle loan, etc. and not have the added financial stress of debt.

  • College expenses

    to ensure that the money is there for your children so their dreams don't die with you.

  • Your current income

    so that your family will have the needed funds to live the lifestyle that they have been accustomed to.

  • Funeral and final expenses

    to ensure that the readily available funds to cover the cost of your funeral, burial, and possibly outstanding medical bills so your family isn't stuck with the bill.

At Protective Life, we understand that everyone has different life insurance needs and that no two DNA tests are alike. If you're in need of an insurance DNA, just pick up the phone and a Protective Life representative will help you calculate how much life insurance coverage you may need. And, if you want a quick and easy way to estimate your life insurance needs, try our Life Insurance Needs Calculator. Simply tell us a little about yourself and we'll help you find out how much life insurance you may need.

1LIMRA 2015 Insurance Barometer Study
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How Much Life Insurance Do I Need?

If you're looking for life insurance, the first question that may come to your mind is, “How much should I buy?” One way to determine how much coverage you may need is with a detailed needs analysis (DNA). A DNA considers many different factors that can help you better estimate just how much coverage you may need. For more information, visit the Protective Life Learning Center.

All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Learning Center articles may describe services and financial products not offered by Protective Life or its subsidiaries. Descriptions of financial products contained in Learning Center articles are not intended to represent those offered by Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax-related decisions. For information about Protective Life and its products and services, visit www.protective.com.

Companies and organizations linked from Learning Center articles have no affiliation with Protective Life or its subsidiaries.