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Life Insurance Calculator

How much life insurance do you need? Use our life insurance calculator to see a breakdown of your family's future income and expenses.
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When Should You Have Life Insurance?

The necessity of life insurance depends on the situation at hand and those who you are responsible for.

If you don’t have any dependents, more than likely you don’t need a life insurance plan. Moreover, if you aren’t the main breadwinner in your household, you may or may not have need of life insurance. If you do have dependents – our life insurance calculator above can help you to understand you future income – and adjust your coverage accordingly.

Keep in mind that if your financial obligations such as paying the mortgage and other bills, it’s necessary to get life insurance. In addition to, it’s a great way to cover other expenses such as your child’s college tuition in the event of your death.

Furthermore, here are some things to keep note of when buying insurance:

How Much Do You Need

Frankly, there isn’t a “right” answer to how much life insurance you think you’ll need. Your income, number of dependents, your debts and lifestyle are factors in determining the right life insurance policy.

On the other hand, there is a guideline available to help make the best decision. It’s great to consider a life insurance policy that’s equal to five to ten times your salary towards the end of your life expectancy. One of the major roles of an insurance agent is to help you gage your life expectancy based on you take care of yourself.

Moreover, the wisest thing for you to do is to talk with your financial counselor to determine what’s the right policy for you.

Life Insurance: Individual vs Group

It’s common for people to get a group life insurance plan from their employer. A group life insurance plans a single plan that covers all employees no matter their current health status.

There are two main advantages of a group life insurance. First off, the rule of the economies of scales makes this plan relatively cheap. Another thing to note, it isn’t necessary to get a medical examination, with is a good thing for people with pre-existing medical conditions. For those who have poor health, this is the best way to get a policy at a good price.

On the other side of the coin, there are two concert disadvantages of a group life insurance.

  1. Typically, there is a cap on how much insurance you can get by the insurer. For some people, the amount may not be enough to cover the what is necessary to have.
  2. The insurance is only good as loans the employer offers the benefit and those their ensuring remains working there. If anyone of these factors stops complying, the insurance is no longer active. Moreover, some companies allow former employers to keep their insurance at their own expense. Usually, the insurance premium increases at this point. In a nutshell, you are not in control of your own insurance coverage.

These two issues are irrelevant in an individual insurance policy. This policy is super simplistic and you have the opportunity to buy in the market. You are not bound by your employment status. As a result, it remains in effect as long as you continue to pay your premiums.

 Different Types Of Life Insurance Policies

Life insurance policies differ; there aren't all the same.

There are policies that accumulate cash value over a long period of time as well as those who cover only for a short period of time. Most insurance companies offer the following policies: cash value life insurance and term life insurance. The rates for term life insurance are quite low. On the other hand, cash value life insurance starts out initially with a higher rate. Moreover, a cash value life insurance has other benefits such as:

  • You have the opportunity to borrow against your policy. In other words, you can take out a loan. Also, keep in mind that you have to repay the loan or the company will take the amount you owe from your death benefits.
  • You can buy more insurance with the cash you accrue.
  • Your retirement income has the ability to increase with the cash value.

Term Vs Cash Life Insurance 

There are different options for these types of life insurances. Here are some of them:

Term life insurances have limiting coverages such as 10, 15, or even 20 years. Moreover, your initial premiums don't change for that initial period. Also, the term life insurance will either continue or discontinue. In a case that it does continue, the individual has to pay a higher rate.

Universal life insurance offers mobility to an individual; it's also a permanent insurance. You can diversify the amount of your out-of-pocket insurance premiums. Moreover, you can take action on this as a result of using your earnings to cover part of your insurance premiums. Another thing to note is that you can revamp the amount of death benefit to your beneficiary. Above all, there is a cost to take advantage of this flexibility; you end up paying higher administrative fees.

Whole life insurance provides an individual with a lifetime of insurance; it's also another type of permanent insurance. It comes with a fixed premium, and it builds cash value at the same time. In addition to, the cash value is just like a savings account; it also has a tax-deferred feature.

This is an expensive type of life insurance because of companies want big commissions and fees in the early years. Moreover, there is little, additional revenue to increase the cash value. Most companies implement these fees into complex investment formulas that the buyers don't see. Also, most of the money goes to the insurance agents, agencies, and unit managers.

Variable life policies is another permanent insurance that you can consider. Furthermore, you have the opportunity to build up a cash reserve that you can invest in multiple options the insurance company offers. Also, keep in mind that the cash reserves are dependent on how well these investments do in the market. The better they do in the market, the higher your cash reserves.

Indicators To Choose The Right Type Of Life Insurance Policy

The main thing to take into account when choosing a life insurance policy is whether or not you trust them with your money. For those who live in the US, it's especially important to choose wisely because there is no special security blanket. Making the right choice is a crucial part of securing your finances as a whole.

Overall, this is why it's so important to do your research to make the right decision.

Here are some attributes to consider while shopping around for your insurance needs:


Don't let a company’s marketing tactics reel you in; always be willing to search all things out.

Often times, various insurance companies spend millions on marketing and advertisement to make their presence known. Remember to always track reputation. It's a good thing to consider companies who's been around for a long period of time first rather than new upstarts.

Premium And Fees

A premium is an amount you pay frequently, in according to your insurance policy, to the insurance company.

Furthermore, death benefits and the type of insurance very among various insurance companies. The reasons are that certain premiums don't have the same value and benefits, or they charge just higher rates altogether.

Financial Stability

Every state has an insurance department that monitors the financial health and compliance of various insurance companies in the state. Their role is to prevent any discrepancies or the inability of insurance companies to pay off the benefits of their customers. Till this day, many insurance companies fall short of meeting these expectations form time to time.

Remember, it's important for you to do your homework and research insurer’s financial stability before committing.

Customer Service

This is an aspect that you don't want to take lightly. Be observant and analyze their behavior towards other potential clients and customer service system. For instance, are the easy to reach via over the phone, in person, or online? Do they sound as though they sincerely care about your situation, or do they give the impression of just wanting to sell?

Since this will be a long-term relationship, you want to make sure that you choose the right company that treats you right.

The Bottom Line

The internet is one of the most powerful tools to find the right life insurance company. You have the ability to research a good broker, financial advisor, and learn more about the basics of insurance. You're only just a few clicks away.

A very reputable financial advisor names Alice Mann advises that if you want insurance, buy a term; if you want an investment, buy an investment. Don't buy insurance and don't ever mix the two (See Life Insurance as an Investment). Unless you're a financial genius, it's best to go with term life insurance.