There is nothing more uncertain than life, and therefore nothing more comforting than a Life Insurance policy. That’s precisely why the following six aspects are food for thought while calculating how much Life Insurance cover do you need.
Let’s get some pondering done, shall we?
Rent
Begin by thinking about the house. If it is rented, how will the rent be taken care of when you’re gone? How long will the house be rented? Could there be any possible increase in the rent rates?
Dependents
After the house, let’s think about the people who live in it. Consider the number of dependents you have – parents, spouse, children, and grandchildren. Try to translate their probable and contingent needs into monetary terms and calculate how much you need to provide for till the time an alternate source of income comes along.
Debts
Dependents aren’t just the ones you need to take care of. Make sure to take into attendance all your debts – be it in the form of store cards, credit cards or personal loans.
Mortgage
Talking of debts, let’s not forget mortgage. If you have one, make sure to check its most recent status. How much do you still owe? What is the outstanding balance?
Contingencies
Don’t forget to pay suitable attention to the uncertainties that arrive unannounced like uninvited guests. Calculate how much amount you would like to leave behind as a lump sum to deal with future contingencies, your demise being one of them.
Other life cover(s)
Take a nice and detailed look at the other life covers that you may have. It could be a ‘death in service’ cover from your employer or something else of the sort. Make sure to evaluate their figures before you figure out the amount of your life insurance cover.