Calculating your life insurance needs.

I have been writing about insurance for long now and was wondering if there is any tool that is intended to assist you in approximating an amount of life insurance coverage if your death occurs today. And yes, through my browsing i was introduced to this concept of life insurance calculator. It really works! It gives you an idea of how much life insurance coverage is required by you and your family and if already have one, you can calculate is it enough or not.

I have tried to demonstrate this tool in a simpler form. Just answer the questions below and note down the answer in approximate figures so as you can calculate the total amount at the end.

Life insurance requirements.

How much of your income will your family require each year after your death?

How much would be required by your family to pay off your mortgage loan or pay your rent if you die?

How much your family would require paying your funeral costs?
How much would be required for any other needs such as an emergency fund, gifts to charity, or a family member with special needs?
How much would be required to pay off any other debts like credit card balances, car loans, student loans, personal loans, etc.?
How much would be required to provide for your children's education if you die?
How much resources are available to meet these needs

How much life insurance (your, your spouse’s, your children’s) do you have now?

What other assets (such as savings accounts, CDs, mutual funds, stocks, bonds, 401k, retirement plans, or pension plans) would you want your family to use to meet these needs?

A comparison of the figures between the life insurance requirements and the available resources will give you an approximate value of amount that would be required by your family to survive after your death. This calculator is a quick way to get an estimate of your life insurance needs. You may also want to complete this calculator for your spouse to see if she/he has a need for life insurance or not.