Life insurance calculator for estimating your life insurance requirements
Unfortunately, death, like taxes, is unavoidable. It may not be a fun topic to think about, but it is important to ensure you carry enough financial resources, including life insurance, to protect your loved ones who may depend on your income. When you pass away, your life insurance will help them cover your funeral costs, pay off your debts and make it a bit less burdensome to manage their day-to-day living expenses and future outgoings.
If you are not sure whether your coverage is sufficient or you don't have any life policy at all, here's how to estimate your potential coverage requirements. What you need to do is to consider your financial position at the moment and forecast what your loved ones might need after your passing and in the future years.
By calculating your future financial commitments and then deducting your assets from this number, you'll get a gap that life insurance can help to fill.
Our life insurance calculator below takes into account your existing assets and future outgoings to help you estimate how much life insurance coverage you might want.
Also, bear in mind that the more years you want to support your loved ones with your previous level of income when you're no longer able to, the greater your life insurance amount requirement would be.
Life Insurance Calculator
Do you have any dependents or anyone else like a charity you'd like to support after you pass away?
Now that you have a rough idea how much your life insurance requirements could be, it may be worthwhile to consider buying a little more coverage than you think you’ll need instead of buying less.
This is because your income will probably rise over the years, but so will your expenses. An extra buffer will allow your loved ones to maintain their lifestyles at that time.
Talk through these numbers with your spouse and how much they would need to replace should your income be no longer available.
While it's never a bad idea to buy as much coverage for your loved ones as you can afford, you need to ensure your payments are within your budget and that you are able to allocate this sum each month for as long as your policy remains in place.
You may also consider arranging multiple, but smaller policies, instead of a single larger one. This may help you reduce your total costs, while still achieving a good coverage profile.
For example, one longer term (25+ years) life insurance policy could cover your wife or husband until you retire, while another shorter term policy (up to 20 years) could cover your children until they finish their education and start getting their own incomes.
Ask our award-winning insurance advisers to estimate your costs for a single larger or a couple of smaller policies. They are available to assist you in this analysis at no cost via button below.
If you are a younger family, you may want to go for a longer term policy to cover your kids while they are growing up. By doing that you won't have to get coverage again a few years later when rates will be higher because of your older age.
If you'd like to get your free no-obligation assessment of life insurance requirements and which life and other insurance products from which providers can be most suitable for your circumstances, you can do so in less than 30 seconds.
Book a free consultation with one of our super-friendly award-winning insurance advisers by filling in a quick form available by tapping on the button below.