You know you need to protect your loved ones, but just how much protection do you require? Also, people who already have life insurance, may wish to know if their current coverage is adequate. Having too much coverage, means higher premiums, yet not having enough undermines the reason people buy life insurance in the first place. Although your best option is to discuss your life insurance needs with a certified professional, this article will give a brief overview of the factors that are used to assess your insurance needs. After the article, our insurance calculator can give you an instant estimate.
To ensure that your family can continue to enjoy their current lifestyle, and fulfill their financial obligations, even if you were to die, means figuring out just how much your current way of life costs. In order to assess your life insurance needs you will need to understand the costs of two main categories.
The first category are things such as mortgage, personal debt and student loans will all have to be considered in calculating your insurance needs. These obligations are immediate in that they will be paid off with your death benefit. Included with this category are other expenses such as the cost of a funeral, or any extended medical needs. Since these costs are fixed, they are also straight forward. The second category is a more involved in that you have to calculate how much money is needed in the future to sustain your beneficiaries current lifestyle.
Providing for the Future
To calculate the second category you will need to estimate how much extra money will be needed to replace the income of the insured. Estimates can vary, but are usually based on multiplying your current income by the number of years you would like to provide coverage for. Estimates for how many years really boils down to someone’s current life situation and what you want your life insurance to do for you. Wanting support for a longer period, means more insurance, but if you simply want the insurance to provide a short term stopgap then not as much will be needed.
Need More Information?
As so many factors go into this important decision, the best option for those looking to purchase life insurance is to talk with a certified professional. Our life insurance calculator only offers a broad estimate, whereas professional consultation can help you determine a much more definitive answer. LifeCover.ca specializes in connecting people with certified independent insurance brokers across Canada.
See just how easy insurance can be by requesting a free comparison quote today.