Use a Life Insurance Premium Calculator to Determine How Much You Need

Posted by Ritikashah11998 on July 11th, 2016

One of the most useful tools you can use right now is a life insurance premium calculator or a life needs calculator. They're the same thing, but carry two different titles. There are a ton of different options to choose from when deciding on a perfect policy for you and your family. You can guess at the amount you want to buy by using the 5 to 10 years income rule agents use to ballpark a figure for you, or you can use a life insurance premium calculator to get an accurate figure by taking a few extra minutes to answer several pertinent questions.

Here's a quick guide to get you started on what information to gather before going to a life insurance premium calculator. This guide is geared toward couples with or without children or persons who have one or more people that are financially dependent upon them:

1. Estimate funeral expenses. Currently, a low key funeral will cost around ,000. Increase the amount by half or fully double it to account for inflation or a more elaborate service.

2. Estimate estate taxes on what you leave behind.

3. Calculate unpaid debt with your mortgage excluded.

4. Calculate how much "mad money" you need for unexpected emergencies and expenses.

5. If you plan on paying for your children's higher education, plan for at least ,000 per child. This is for a "cheap" college or university. Double or triple the amount if they plan on going to Harvard.

6. What would the family's annual living expenses be if you weren't around? This could run anywhere from ,000 to 0,000 for the average household.

7. If your spouse would continue working after your passing then deduct their salary from the amount of coverage you need. This would lower your premium somewhat. However, if you want to plan for an eventuality where you spouse would no longer need to work, then ignore this step and plan for no extra income.

8. Take into account any Social Security Benefits your spouse might receive. If you aren't comfortable relying on this, then calculate as though it won't be there. Be aware, though, that the higher amount of coverage you buy, the more the premiums will cost.

9. What are your assets? Value your savings and investments and enter this into the life insurance premium calculator when it's asked for.

10. What type of approach does your spouse take to investments? If they're more conservative or more aggressive then respond in kind when/if you're asked this.

Answer honestly and concisely and you'll have a very accurate needed coverage overview in no time.

Source: http://youknowitbaby.com/article/12676/use_a_life_insurance_premium_calculator_to_determine_how_much_you_need.html

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