Life is full of uncertainties, and it is everyone’s duty to financially and emotionally secure their family. Term insurance plans provides financial support to the family. Sum assured or the coverage plays a vital role while purchasing a plan.
The cover should be equivalent to one’s financial worth since it is a result of direct contribution. Hence while estimating the cover one can use a term insurance premium calculator. The term insurance premium calculator gives good ideas on several aspects such as cover premium, etc.
Every family is different and hence they needs are different too. So, one must customize the plan accordingly. But most off the basic needs may remain similar such as
- Monthly expenses to maintain kitchen and the household.
- Funding for children’s education and marriage.
- Corpus for the retirement life of their spouse.
Monthly Expenses:
Monthly expenses of the family are the primary thing one should take into account. Term insurance plan one selects should have the capacity of providing monthly income or sufficient money in generating an income which is sufficient for the monthly budget Of the household. Now the nominee can choose to get the amount as a lump-sum payment or as an income. This helps the family to continue without getting stressed about Income. Term life insurance calculator can help.
Money Needed For Children Higher Education And Marriages:
Children need money in order to continue their studies. Marriages also requires a decent amount. So, one must keep this in mind before proceeding with the purchase. Moreover, estimating the cost would be simple when you are using a term insurance premium calculator. One just needs to take the current cost of their goals into consideration.
What should be the assured sum for your term insurance plans? First, it is essential to understand what is sum assured. Then, to estimate the sum assured needed at the moment, one must use a similar method often used by financial planners.
Typical Assets And Cost:
Most of the assets and cost incurred are more than what they look on the surface. Now let us see some of them here:
- House Renovation Charges: When a person is staying in their own house with family it is likely that the house needs to be renovated or reworked after 10 to 15 years. But this could be an expensive affair. So, one mask leaves some amount in the insurance which can cover the cost and not burden the family. Use a term life insurance calculator.
- Different Financial Goals: Every family has different financial goals. Any goal which is important to the family should be covered such as trip or may be a specific culture. Covering the aspirations is always a good thing.
- Credit Card: Credit card helps a family to fulfill their immediate financial needs. Hence the cover should also include credit card bills because the amount spent now will become a liability in the future and the claim amount can fulfill this later.
- Equity And Gold Investments: Though it is not advisable to take these assets into consideration while estimating the cover one can consider 50% of the value. The reason behind this is volatility. These properties may look good now, but no one can estimate their value in the future.
- Real Estate Should Not Be Considered: People do not consider real estate generally because of two reasons:
- Conversion to cash is not an easy process.
- Dependents may get additional income from them.
How To Calculate Current Financial Worth?
For calculating the financial worth, one must always consider the liquid assets liabilities and goals. Then they can get to an approximate figure they should contribute. This becomes one’s financial worth to their family in a way.
Term Insurance Premium Calculator
A term insurance premium calculator is very simple to use and gives results quickly. One simply needs to enter all their details such as age income etc. The term insurance premium calculator works according to the details provided to produce results. Hence one must provide correct details to get the result.
Once the calculation is done you can proceed with the purchase of the policy. But it is good to look at some of the features such as premium payment method, life cover, opportunity to increase the coverage and pay options. So never compromise on and financial safety of your family. Always use a term insurance premium calculator to estimate financial worth as well as cover needed for your family. You can use tax calculator to understand the tax exemptions for your policy.