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Decision framework · Protection
Insurance Needs Analysis Framework
Comprehensive decision tree for determining optimal coverage across life, disability, health, and property insurance
01
Calculate Life Insurance Needs
Key questions
- What is 10-12x your annual income for income replacement?
- What outstanding debts need to be covered (mortgage, loans)?
- What are future education costs for dependents?
- What final expenses should be covered?
ConsiderationsTerm life insurance is typically the most cost-effective option. Calculate the gap between needs and existing coverage.
02
Evaluate Disability Insurance
Key questions
- Does your employer offer disability coverage? What percentage?
- Is 60-70% of gross income covered?
- Is it own-occupation or any-occupation definition?
- What is the waiting period and benefit duration?
ConsiderationsDisability is more likely than death during working years. Own-occupation policies provide better protection for specialized workers.
03
Assess Health Insurance Options
Key questions
- What are the total annual costs (premiums + out-of-pocket)?
- Are your preferred doctors in-network?
- What prescription coverage do you need?
- Are you eligible for an HSA with a high-deductible plan?
ConsiderationsCompare plans by total potential cost, not just premiums. HSA-eligible plans offer triple tax advantages for those who can handle higher deductibles.
04
Review Property & Liability Coverage
Key questions
- Is your home insured for replacement cost, not market value?
- Is personal property coverage adequate for your belongings?
- What is your liability coverage limit?
- Do you need umbrella insurance for additional liability protection?
ConsiderationsLiability exposure often exceeds people's coverage. Consider umbrella insurance once assets exceed basic policy limits.
05
Create Implementation Plan
Key questions
- Which gaps are highest priority to address?
- What is your budget for insurance premiums?
- When should policies be reviewed and updated?
- How do all policies work together?
ConsiderationsPrioritize catastrophic risks first. Set annual review reminders to update coverage as life circumstances change.
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