Insurance Calculator: How Much Life Cover Do You Need?

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While buying a life cover, having an adequate sum assured is of utmost importance. The mere purchase of it does not help if you remain underinsured. To safeguard your loved ones from the financial worries in your absence, you must use an insurance calculator to avoid insufficient coverage further in times of crisis.

Almost everyone today knows the value of life insurance. But many of you end up ignoring the actual amount that is required to cover the whole family. That is why using an insurance calculator is of utmost importance. As purchasing a life plan is a crucial financial decision, you need to consider various factors to make sure that you have an adequate cover. Make sure to have a basic understanding of the life insurance features and all the riders available with it for optimal protection.

Read on to see how can you choose an adequate life insurance cover for you and your family.

Factors to Consider While Buying Life Insurance

  • Annual Income

Budget is a crucial aspect to consider while looking for a life cover. You need to assess the amount that you can set aside for life insurance premiums out of your annual income.  Also, consider how much your family will need in case of your demise. It will provide you with an idea of how much corpus is required for them to continue their lifestyle without any financial hardships.

An insurance calculator can help you choose a suitable policy by giving you estimate numbers. You just have to fill in your income and other details to get quotes online.

  • Age

One of the critical elements in determining your life insurance needs is you and your family member’s age. At a young age, you generally have more options as you are away from severe health conditions. This is why it is advisable to invest in life cover as soon as you start earning. You can get a more comprehensive cover with affordable premiums at a young age. You are advised not to delay your decision of buying a life insurance policy and use insurance calculator online to select the right plan.

  • Premium Payable

Thanks to the online mode, we have a plethora of options and insurance premium calculators available today. You can easily browse through your options and pick the most suitable policy. An insurance calculator is a cherry on top while buying insurance online. It is of great help as it guides you in finalizing your decision by giving accurate numbers along with premium payable.

  • Existing Financial Liabilities

While choosing the sum assured for your life insurance policy, it is advisable to take in/to account your debts or any liabilities that may trouble your family later. Always remember that it is good to be over-insured than being underinsured.

With the current rate of inflation, it is suggested to buy a high sum insured. The life insurance plan acts as an income replacement in your absence and lessens your family’s financial burden. The purpose of life insurance is to build you a secure future irrespective of life’s uncertainty. So, make sure you choose an adequate sum assured by considering all the above points for maximum benefits.

Use An Insurance Premium Calculator to Make the Right Choice

There is no doubt that online calculators have made our lives easier. Take HRA calculation, for example; you do not need to get into complex calculations to know your house rent allowance. Instead, you can use an online calculator and get the result in seconds.

Similarly, insurance calculator eases your job of finding a suitable policy for you and your family. Since it is a crucial financial decision, you must use an insurance calculator online for accuracy of numbers and better management of funds. An insurance calculator from reputable insurers gives you a clearer picture of your premium amount and the following payments.

Also, choose a term life insurance plan that covers specific health conditions, if you have any. Look for add-ons such as critical illness benefit, waiver of premium, disability benefit and accidental death benefit.  Make a wise decision by considering your life stage and age to nurture the dreams of your loved ones.

Do your homework and identify the purpose of buying life insurance before making a decision. It is good to keep a list of questions prepared with you in case you are having second thoughts about an insurer or the policy. For a better idea, check for online reviews and the claim settlement ratio of the provider. It indicates the number of death claims settled successfully.

Lastly, do not be a victim of mis-selling and prefer online mode rather than buying insurance offline through local agents. Always use an insurance calculator for efficient planning of funds.

Read Next: Is your Health Insurance Policy a good investment?

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