Capital Need Analysis (CNA)
This is the best way to determine how much life Insurance a person should have by analyzing the various needs that would be experience by the family in event of death of a breadwinner.
Average family normally has following needs:
(1) The cleanup fund (The last illness and cremation expense -outstanding loans etc.)
(2) Income for family to maintain present standard of living.
(3) Special needs: Mortgage redemption, emergency fund, education fund and any other specific needs, depending upon the individual requirements.
(4) Retirement needs.
It is also necessary for the family to determine the order of priority of the various needs, since the ability to pay the premium may prevent the attainment of all the desired needs currently.
After determining the financial objectives, needs and their order of priority, it is necessary to determine what benefit/sources are available to meet these needs. So consideration should be given to Investment income, Death benefits from employer, Present Insurance etc.
This is the best way to determine how much life Insurance a person should have by analyzing the various needs that would be experience by the family in event of death of a breadwinner.
Average family normally has following needs:
(1) The cleanup fund (The last illness and cremation expense -outstanding loans etc.)
(2) Income for family to maintain present standard of living.
(3) Special needs: Mortgage redemption, emergency fund, education fund and any other specific needs, depending upon the individual requirements.
(4) Retirement needs.
It is also necessary for the family to determine the order of priority of the various needs, since the ability to pay the premium may prevent the attainment of all the desired needs currently.
After determining the financial objectives, needs and their order of priority, it is necessary to determine what benefit/sources are available to meet these needs. So consideration should be given to Investment income, Death benefits from employer, Present Insurance etc.
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