Have you heard the phrase, "If all you have is a hammer, everything looks like a nail"?
This is how many inexperienced life insurance advisers approach a sale.
Their only tool is life insurance.
Whether it's right for you or not, it doesn't matter.
This is when life insurance gets complex. It's when parents buy a policy they don't understand, for far too much money.
Or, there's the opposite approach other advisers insist on using to calculate your needs, rules of thumb.
Using rules of thumb, as I'll explain, is over simplification.
So, when calculating the amount of life insurance to buy, where do you start?
The best place is to remind yourself of the purpose of life insurance, which is income replacement.