How Much do You need? – Whole life Insurance Calculator
A Whole life insurance calculator can quickly determine your life insurance needs and is a simple and easy way to give yourself some peace of mind.
What is Whole Life Insurance
- Whole life insurance is a life insurance that will last for the course of your whole life if you maintain the premiums as outlined in the policy.
- Getting a whole life insurance online quote and policy is quite easy but you owe it to yourself to find out which is better for you; whole life VS term insurance policies? Which policy will fit your needs the best?
- If you don’t have any other investments, don’t own your home (or don’t plan on purchasing a home) then whole life insurance may be your best option. But first you should know a few things about whole life insurance.
- Whole life insurance US term policies are considered an investment. They are a low interest bearing investment tool (around < 3% annually).
- Whole life insurance ratings and company longevity are only as stable and secure as the company that bears the policy so use a reputable insurance provider.
- Whole life insurance policies are much more expensive than their term life insurance counterparts. But whole life policies will also last the life of the insured. If you need life insurance into your 60’s, 70’s and 80’s, whole life is the only choice.
- A Term policies will only last for the length of the term. This is usually 10, 20 or 30 years. At the end of this term the policy is done. No more coverage exists under the policy unless so stated. (Unusual) All money is lost unless you opted for a “return of premium Ryder”.
- Term life insurance policies are the best option for most consumers searching for life insurance. However…
If you need an additional stable-but-low-yield investment then whole life may be the right choice for you. To calculate your Total life insurance need do this series of simple calculations: The Total life insurance estimate is not only a whole life insurance calculator. This would include all of your life insurance policies taken as a total face amount.
Whole Life Insurance Calculator:
- Your annual income: _____________Multiply by x8
- Add 10% for each dependent child
If you are single you may wish to establish a living will and allocate these funds to the will writing out the instructions of how the funds are to be used. If you are not the primary bread winner you could adjust these numbers as you like. In fact these are only recommendations. Your individual needs could vary greatly from this calculator.
For a Whole life insurance Calculator you may wish to provide 20% of these total funds with a whole life insurance policy. I would not suggest using whole life for 100% of the above calculation.
An example of What your Life insurance Portfolio Might look like –A Whole life Insurance Calculator:
Income: $50,000 annually X8= $400,000 total life insurance
X3 children = an additional 30% $400,000 X 30% = $520,000
Total $520,000 of life insurance estimated needs
You could provide 20% of this total number with whole life insurance which would be $104,000. Leaving the rest ($416,000 in term life insurance)
If you are considering whole life insurance, this is the model I would use. You could simplify this a bit by getting a $100,000 whole life insurance policy and the rest in a 20 or 30 year term policy.
Always get the maximum term policy that you are eligible for due to your age and what you can afford.
If you can easily afford a 30 year term over a 20 year term, go for the 30 year every time. The extra 10 years will be a nice cushion should something unforeseen happen with your finances such as the inability to pay off your home.
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