bs-preloader__icon
ru kz en

Optimal size of life insurance policy revealed

Life insurance can be a valuable financial tool for many people. However, with the variety of life insurance policies out there, choosing the right product can be challenging. Bankrate editors office believe that calculating the amount of a life insurance policy depends on many factors, for instance, income, number of dependents, amount of debt and current savings.
Optimal size of life insurance policy revealed

Here are the main points that will help you decide on the required amount:

You need to start from your current annual income, which should be multiplied by the number of years during which your family will depend on this income. For example, if you earn $50,000 a year and want to provide for your family for the next 20 years, you will need $1,000,000 just for income replacement.

Add your current debts (consumer loans, mortgage, etc.) as well as estimated costs, such as children's education and other large expenses to this amount.

Subtract your current savings from the amount received. These could be personal savings, pension savings and other insurance policies.

Don't forget to add contingency costs to the total. Such expenses range from $10,000 to $20,000.

Example

Annual Income - $50,000

Required number of years of support - 20 years

Debts and Liabilities - $200,000 (including mortgage)

Children's education - $100,000

Current savings - $50,000

Current life insurance -$100,000

Contingency costs +$15,000

Based on these figures, you will need insurance in the amount of ($50,000*20)+$200,000+$100,000-$50,000-$100,000+$15,000=$1,165,000.

Source: https://www.aol.com/finance/much-life-insurance-132303568.html

Photos are from open sources.

Share
read also
Seven Ways to Boost Your Immunity
Seven Ways to Boost Your Immunity

There are two types of immunity: genetic and acquired. Genetic immunity penetrates th...

Universal life insurance (ULI) is the main growth driver in the market
Universal life insurance (ULI) is the main growth driver in the market

According to the results of the 1st Q 2019, this segment has already grown almost hal...

Life on minimum wages: how salaries and pensions have been changing in Kazakhstan
Life on minimum wages: how salaries and pensions have been changing in Kazakhstan

Once again on behalf of the President the minimum wage in Kazakhstan will be raised f...

The most interesting materials of the site you have in the mail! Subscribe to the newsletter.

ASK A QUESTION TO THE EXPERT
ASK A QUESTION TO THE EXPERT
Submit your application