Talking about life insurance, death and accidents is probably not an attractive segment of life but getting insurance protection early on can become an intelligent lifetime decision to safeguard your family’s future against sudden spike of liabilities be it your personal, of home or business. It is never appealing to inherit any financial burdens; hence, investing in a life insurance plan always proves to be a sensible choice.
Selecting a Policy
It is essential that a right insurance product of a correct value that you can afford be picked. However, the question that stays in people’s mind is how much worth of policy value you need. Obviously, this differs based on individual factors like needs, liabilities, age, lifestyle, gender and affordability that varies from one person to another.
Therefore, speaking to a financial advisor to get a right kind of advice that is suitable for your needs is essential. Moreover, if you hold an old policy, it is vital that your financial advisor would review it, as once policy may last for several years but their life situations and needs tend to change with time.
Life Insurance Premium Calculators
These days easy availability of online life insurance premium calculators makes it easier to calculate accurately how much life insurance coverage you need and plan for a policy accordingly. This is computed by evaluating your needs like immediate expenses such as a funeral, bills, and other liabilities and the income needed to secure and sustain the household in future. Moreover, online insurance policy comparison sites further make the task easier by allowing you to compare different insurance products based on the sum assurance requirement and make a sensible and accurate choice.
Evaluate Your Needs
Life insurance premium calculator will support you in evaluating the amount of cover you might need, decide how many funds will be required by your family after your death to live a comfortable life, based on your needs and lifestyle, and estimate money required to pay off debts or mortgages. However, these calculators may not provide suggestions on term period of the cover and the type of protection needed. It offers recommendations that you can consider and adjust the figures on your circumstances. However, the calculators may not take factors like inflation and mortgage repayment that can affect the amount of insurance coverage you might need.
The life insurance premium calculators form easy access for the consumers to review their insurance needs directly. The experts say the general thumb rule for calculating once life insurance amount is that it should be 7-10 times their annual income. However, most often the salespeople selling insurance products may recommend the more, the better. Therefore, the life insurance premium calculators will recommend you precisely what is a requirement depending on your situation, protecting you from under-buying or over-paying as generalized rules are not assessing your life circumstances.
Using life insurance premium calculators is also very simple, just follow the prompts and add inputs into the calculator. Based on the data you put, the calculator will assess the correct amount of life insurance needed for your specific situation.
Two essential variables determine sum assured value. First is the amount required at death to pay for immediate responsibilities. Here expenses like unpaid medical bills and other estate-settling and funeral costs are computed, along with the mortgage balance, outstanding debts, and college expenses, among others. Second is the expected future income you desire for the family to support the household, which is driven from accessing the present value of cash-flow streams, which is needed by your family after your death.
With the presence of several financial products and policy comparison portals and life insurance premium calculators readily available on the internet, reviewing different the insurance products, getting quotes, applying for them has become easy. People can conveniently buy a policy with just a few clicks.
Benefits of Life Insurance
- Pays out the sum assured amount on the death of the insured person or after a set period.
- Funds for the future needs, which arises from loss of income of a family member due to his death or illness or disability.
- Easy payment options, can buy life insurance with monthly, quarterly or annual premium payment schemes.
- The life insurance contract secures the dependents when primary breadwinner prematurely dies, paying for immediate funeral expenses and generating sufficient income for the family needs.