After you leave, you need enough life insurance to meet your obligations. Start by analyzing your current financial needs and resources.
Calculating the amount of life insurance needed for a penny can be difficult, but you can use the life insurance calculator below to calculate your options.
Typically, you can add on long-term financial obligations such as a mortgage and college tuition before reducing your money. Life insurance is left to fill the gap.
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Calculating Yourself How Much Life Insurance is Enough for Individuals
Follow this general idea to find your target amount: Financial services as well as net assets.
Step 1: Add the following items to your financial account:
Increase your annual salary by the number of years you want to replace the income.
All other debts
All future needs, such as tuition and funeral expenses.
If applicable, replace the cost with nursing services such as childcare.
Step 2: Subtract liquidity from this amount, such as savings, the current university fund and the current life insurance policy.
You needed life insurance
3 Easy Methods to calculate Life Insurance Premium
If you want to quickly determine your current life insurance needs, food can be an easy way to gain value. These methods are better than random estimates, but they often do not deliver important aspects of the economy.
Use the calculator above to get a better idea of how much life insurance you need and then compare the cost of these plans.
1. Multiply your income by 10.
“10 times your income” is often shared online, but it does not fully address your family’s needs and does not focus on your savings or life insurance plans. And it does not provide insurance for home parents who must have insurance, even if they have no income.
The cost of homework needs to be changed after the death of a parent. At the very least, they have to pay another parent for services, such as childcare provided by a free nursing parent.
»More: Compare Life Insurance Prices.
Buy 10 times your income plus 100,000 100,000 per child for college expenses
Second, this formula raises the “10 times income” standard by adding extra insurance to your child’s education. If you have children, college and other tuition fees are an important factor in calculating insurance. However, this method does not cover all current life, property or family insurance needs.
3. Use the DIME formula.
This formula encourages you to look at your money more than the other two. DIME stands for four areas that you should keep in mind when calculating debt, income, mortgages and education, life insurance requirements.
Debts and final costs: Take out a non-mortgage loan with your significant expenses.
Income: Determine how many years your family needs to increase and support their annual income.
Mortgages: Calculate how much you owe on your mortgage.
Education: Estimate the cost of school and college for your children.
Combining all these services at once makes it much wider for your needs. But while this formula is more accurate, it does not take into account the life insurance coverage and savings you already have. Support from adoptive parents is also not taken into account.