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Should life insurance needs to be based on a family's dream (expectations) for the future? Why...

Should life insurance needs to be based on a family's dream (expectations) for the future? Why or why not? Please form an opinion and support your opinion with facts from the readings.

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Answer #1

Yes, the family's dreams and expectations must be taken into account while determining life insurance needs.

Firstly the family's dreams will determine the amount of spendings and savings involved. This will allow the family to understand the amount of savings they would have in future. Depending upon the future needs, the life insurance requirements can be determined. For instance, the children may dream of a college education at a top university and this must be planned for while determining the future needs. It is essential to make reasonable arrangements that can be fulfilled even without you.

Also the following should be considered in determining the future needs: final expenses, annual living expenses, Outstanding debt, loss of income and cash on hand and other assets.

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