Insurance Needs Analysis

Free CFP Exam lesson in Risk Management and Insurance Planning. 17 min read, ~2,572 words.

Three methods: income replacement (10-12x, rough), human life value (earnings minus personal consumption, discounted), capital needs analysis (all needs minus all resources = gap). Two rates in the fact pattern signal the growing annuity formula; one rate uses the standard annuity. Capital retention (perpetuity, larger number) preserves principal; capital liquidation...