Modern technology has revolutionised many industries and fundamentally changed how consumers access products and services. Acquiring life insurance is now possible online, and doing the requisite research and comparisons has never been easier. One financial tool we can use in our investigations is a life insurance calculator.
What is a Life Insurance Calculator?
A life insurance calculator is an online tool provided by insurance providers or independent websites that offer a reasonably accurate idea of the coverage you need. To use a life insurance calculator effectively, the following information will typically need to be provided:
- Current annual income
An accurate amount is required to determine how much any policy will need to pay to dependents in the unfortunate event of your demise.
- Period of income replacement
Determining the number of years you wish to provide financial support for your dependents is crucial for the system to determine your ideal coverage.
- Outstanding debts
These include mortgages, vehicle loans, credit card debt, and others.
- Anticipated future expenses
You will need to approximate and include any future expenses you expect to incur, including college tuition fees and other significant expenses.
- Investments and savings
You must include a breakdown of your current savings and the value of any investments your dependents can access if disaster strikes.
- Existing life insurance cover
If you already have life insurance coverage, this must be declared.
- Estimated final expenses
A life insurance calculator may require estimating your funeral and burial expenses.
When Should I Use a Life Insurance Calculator?
The most prudent use of a life insurance calculator is when researching policies and comparing life insurance quotes. Although it is unwise to rely solely on the information they provide, they are an excellent tool in your quest to find the most suitable, affordable policies. You will still need to use an online comparison site or speak to the providers directly to obtain a binding quote. However, acquiring as much insight and information as possible beforehand is an excellent way to achieve success, and a life insurance calculator is a handy tool for this.
The Benefits of Using a Life Insurance Calculator: Conclusion
A life insurance calculator is a powerful online tool that gives us a clearer view of how much coverage we need before comparing life insurance quotes. Some of the superb benefits it offers include:
- Personalised coverage requirements
A life insurance calculator bases its findings on your financial situation for an accurate estimate of the coverage you will need.
- User-friendliness
Simply input your details, and the tool does the rest.
- Maximised information when making critical decisions
Information is king when making significant financial purchases; buying life insurance is no exception. A life insurance calculator helps you clarify the details required when purchasing a policy and assess how the various factors affect the outcome.
Although a life insurance calculator is a fantastic tool for gaining information and insight, it cannot replace other aspects of your research. It should be considered more of a guide. You must consult with your shortlisted providers to confirm details and ensure that your chosen coverage is appropriate.
