Life insurance calculators are a type of tool that is designed to help people determine the amount of coverage they may need from a life insurance.
The calculator basically asks for some relevant information, which will then be analyzed and the produce an estimated figure.
Some of the types of information that will be commonly requested for are as such.
The income timescale would be about the prospective policy holder's current age, as well as how many years are there left for their family to live on their income.
Following that would be the income sum, which is how much their family will need to have on an annual basis.
If the policy holder has a partner who has their own income, the sum may be lower than the policy holder's current income.
It could also be more than the current income if there are additional costs that will be needed like child care after the policy holder's death.
The calculator will also ask if there are other savings or life policies that can be used to cover the costs after the death.
You will also be asked for the number of children you have, especially if they have not reached the age of completing college.
This is because children whom have completed college are considered to be able to live independently as they go to work.
The calculator will ask for each child's age in the family so that the college costs will also be included in the estimation.
Other additional expenses like burial costs, after death expenses, tax, and money for special events like weddings will also be included.
The different life insurance calculators will vary in some of the questions, as well as their results.
Some would give estimates for coverage, while other may include other explanations like how the calculations are made or made sense of.
Thus, you might want to try using at least two calculators so that the results can be compared, and you can get your average.