Calculating How Much Life Insurance You Need
by Efin Advisor | May 11, 2009
A friend recently related a story of how a man and his wife had bought and re-bought new life insurance policies several times over the past 5-10 years. As their income increased and their responsibilities grew, they had steadily outgrown their coverage. It’s a common occurrence and easy-to-understand.
While a standard rule of thumb is to lock in a term policy for 8x or 10x your annual salary, the actual coverage amount that is right for your family depends entirely on your personal situation. If you want your life insurance policy to provide support for your family for an extended period of time, you’ll obviously need more coverage. If you’re comfortable with your insurance policy being a short-term stopgap, you can get away with less.
Efinancial offers an online life insurance calculator that allows you to enter data on anticipated one-time expenses, ongoing living expenses, years of need, and any special savings goals you may have. Just a few seconds is all it takes to “crunch the numbers” and give you a cushion to fall back on. In addition, Efinancial also offers Insurance Calculators to determine your Net Worth, estimate the Cost of Raising Children, or calcuating an Annuity. Just scroll down the Efinancial home page to find these handy and informative Insurance Calculator choices.
While you’re visiting, did you know Efinancial has set up an extensive Life Insurance E-Learning Center? Efinancial is one of the few companies in the insurance industry to put a complete, A-Z Insurance Education Center right at your fingertips. We bet there’s not a single life insurance question you want to know about that’s not covered in this online library. But if there is, please let us know!
When estimating the amount of life insurance your family will need, there are a few things you don’t want to forget. Consider whether or not yo uhave coverage from work. But keep in mind, if you lose you your job this benefit could be expendable.
Another important point to consider is whether or not you have a non-working spouse. Are you relatively early in your career path? Do you plan on expanding your family? Do you anticipate any other major changes in the future? If so, then it’s likely that your life insurance needs will change (perhaps dramatically) in the years ahead.
You guys have made it easy to make the smart financial decisions. I was looking for an online calculator and found not one, but five right on your Website Very much appreciated!
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Nice info
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This is a problem my wife and I have always had. I never knew there were simple calculators to help us with this. Thanks efinancial
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Just out of curiousity for the other readers, do you feel you should calculate your policy base upon the liellyhood of getting a raise or should you get new policies each time. I am just beggining the life insurance shopping and am curious what other people think
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Even as a loyal efinancial custommer, I have always found that the rate calculator is a helpful tool but yw insurance agents are incredibly helpful and knowledable. I recommend going them a call
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This makes perfect sense. Now I can plan far enough ahead to support my means. As my needs grow, I can make arrangements to support my family. I have been searching for the right policy, and look for as many free rate quotes as I can get, but have always been uncertain what level of coverage would be appropriate. Thanks EFinancial!
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Helpful info. Too often people underestimate how much life insurance they should carry for their family.
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it easy to make the smart financial decisions. I was looking for an online calculator and found not one, but five right on your Website Very much appreciated!
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