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

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Use a Life Insurance Premium Calculator to
Determine How Much You Need
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• 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.
• What is life insurance premium?
• It is regular amount pays to insurance company to
  purchase a policy and to keep it in force in
  return the insurance company agrees to pay your
  nominee or beneficiary a sum of money upon your
  demise. In the event you suffer total and
  permanent disability, the payment will be made to
  you in these circumstances the money is usually
  payable in installments.

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• How is your life insurance premium calculated?
• Life insurance companies don't take risks to
  cover an insured when they are determining the
  rates, they want to take precautions to ensure
  the insured won't die prematurely, because the
  pay out will be more than the amount the insured
  paid.
• The insurance companies collect the premiums from
  the policyholders and pay for the overhead and
  administrative expenses, they invest the money to
  create a pool of money to pay claims and make
  their profit from investment, premiums collected
  are not enough to sustain, so they have to
  calculate precisely, otherwise their business
  will be at a loss.
• 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

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• 1. Estimate funeral expenses. Currently, a low
  key funeral will cost around 10,000. 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 75,000 per
  child. This is for a "cheap" college or
  university. Double or triple the amount if they
  plan on going to Harvard.

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• 6. What would the family's annual living expenses
  be if you weren't around? This could run anywhere
  from 25,000 to 150,000 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 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.

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insurance-calculator.jsp
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