Understanding Life Insurance Calculators

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Understanding Life Insurance Calculators
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• With the holiday rush in full swing, finishing
  your holiday gift buying probably ranks high on
  your to-do list. But whats just as important as
  crossing that last gift off the list is making
  sure you budgeted enough to cover the entire
  list. One gift you might consider this holiday
  season is the gift of your familys financial
  security in case the unthinkable happens.

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• Calculating how much life insurance you need may
  seem a bit more daunting than determining your
  gift giving budget, but using SelectQuotes Life
  Insurance Calculator makes doing so quick and
  simple. However, if you want a better
  understanding of exactly what is taken into
  consideration when calculating your life
  insurance need, it comes down to two factors how
  much do you need to cover immediate obligations
  and how much future income will your family need
  to sustain their livelihood?

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• Calculating the immediate obligations is
  relatively easy since they are typically fixed,
  lump-sum figures. The first portion will include
  final expenses, such as funeral costs, any
  uncovered medical expenses, and final
  estate-settlement costs. Then, include the rest
  of your financial obligations such as your
  mortgage, any outstanding debts and college funds
  for your children. Most all of these figures are
  already set or require a small amount of research
  to estimate.

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• The second factor in determining the coverage you
  need takes a little more work as you are
  predicting what amount of capital your family
  would need if you were no longer able to
  contribute to the family income. Looking at your
  familys financial needs now will give you a
  better sense of what amount of insurance you
  need. A good place to start is to determine how
  much total annual income your family currently
  needs. You can then ask yourself how many years
  will they need to rely on this amount of income,
  taking into account how old your children are and
  at what point do they start to provide for
  themselves?
• As you start to come to a figure that encompasses
  the amount of income your family will need for a
  specific window of time and your immediate
  obligations, you can start to take into account
  the factors that can lower this estimate. If
  your spouse currently works, you can estimate how
  much income that he or she can provide over the
  number of years he or she is planning to work and
  subtract this from your total life insurance
  need. Then compile any current savings,
  retirement savings, investments and assets that
  could be liquidated into a single sum and deduct
  from the total life insurance need.

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