Term Life Insurance Calculator
Reader’s Question:
My son told me that I need a term life insurance calculator to help me asses the right amount of life insurance to meet my needs. Can you enlighten me regarding how this thing works?
Amanda
Santa Barbara CA
Your son is right, Amanda. A term life insurance calculator can help you determine the life insurance amount that you need to meet your needs. However, you also have to consider certain basic things before choosing your life insurance policy. Among the questions you need to ask yourself are what kind of insurance do you need and how much can you afford to pay your insurance.
The basic rule used by many insurance agents to determine how much life insurance you need is that your life insurance should be 7 to 10 times of your annual income. This means that when you are earning $3,600 annually, your life insurance coverage should be around $25,200 to $36,000 to adequately protect your loved ones.
The logic behind this is that when your beneficiary invests the benefit they receive upon your death, the income they will receive from the return on investment will replace your income that has been lost forever. However, in reality, even if your life insurance premium is ten times more than your income, your beneficiary will require a 10% return on investment to replace your income.
A term life insurance calculator provides a more accurate option to assess the adequate amount of life insurance you need. These calculators are available all over the internet for those who wanted to assess their needs. Basically, all you have to do is to respond to a survey with questions related to your current financial status. With a press of a button, the adequate amount you need for your life insurance is calculated within seconds. It’s that quick and easy.
In addition, since the questions asked in a term life insurance calculator are related to your current financial status, you will be sure that the result you will receive is personalized and customized to suit your needs.
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