Final answer:
The process to determine how much insurance a family needs based on their financial goals is known as the needs approach, involving the calculation of necessary life insurance coverage considering income, debts, and future obligations.
Step-by-step explanation:
Attempting to determine how much insurance a family would require based on their financial objectives is known as the needs approach. This strategy takes into account various factors such as income, expenses, current debts, and future obligations (like education for children or retirement) to calculate the amount of life insurance needed to ensure financial stability in case of any unforeseen events. Insurance involves making regular premium payments to protect from significant financial losses, with premiums based on the probability of certain events occurring and the role of risk groups in determining actuarial fairness.