There are four methods for determining how much cheap life insurance is needed: X times gross earnings, multiples of salary, insurance needs analysis, and the present-value concept. There is also form 706 and the “other form” approach.
Of these, in our opinion, the present-value concept is the most useful, reliable, and practical for use in determination of income-replacement needs. Without a present-value calculation based on 75 percent of your financial base (taxable income plus deductions and exemptions minus federal and state taxes, if any), you will have no idea how much life insurance is enough. This calculation should be redone at least every 2 years.
Cheap Life Insurance Quotes Online
Get instant term insurance quotes from top insurance companies. Compare cheap life insurance quotes online and choose the policy that is right for you! Click and compare quotes from 2-3 companies before you purchase. Talk to you insurance agent to see what amount of coverage is right for you and your family.
How Much Cheap Term Life Insurance Do You Need?
We’ll help you find out how much you really need. One rule of thumb is to multiply your income by 17 and buy that amount of cheap term life insurance. So if you bring home $48,000 a year you need $816,000 in term insurance. This is a rough estimate, just remember two things. Only buy term insurance for income replacement and family protection. Think of life insurance in terms of income replacement. How much income will you need and for how long?
The best way to buy life insurance coverage is to shop on the internet for free rate quotes.
What Will Affect Your Affordable Life Insurance Quotes?
Your Gender – Did you know that men pay more for their life insurance than women? That’s because they have shorter life expectancies and because there are more risk factors associated with males.
Your Age – This is a pretty obvious point, but the older you are when you shop for life insurance quotes, the higher they will be. Up until about age fifty, you will pay much less; after age fifty, life insurance quotes rise dramatically with every passing year.
Your Health – When you receive cheap life insurance quotes and have narrowed down your search, the insurance agency will need to know more about your health. People with low blood pressure and low cholesterol – and those who aren’t overweight – pay less than those who are overweight and have high blood pressure and bad cholesterol.
Life Insurance is more affordable than ever – get multiple quotes today!
Whether your life insurance premiums are very cheap, or unreasonably high, there are choices you can make that will help you find a cheap life insurance policy.
Opportunity cost or discount rate is a moving target. Assumption of a specific rate will depend upon the current economic environment. Life insurance with all premiums vanished can be used as collateral to pay for serious medical expenses. Be conservative in the use of an assumed interest rate when determining how to invest your money.
Be ever mindful that there is a substantial difference between calculating the present-value amount of money required on a real dollar basis and calculating it on a constant dollar basis.
Life insurance agents skilled in use of a hand-held calculator can calculate present-value requirements on a constant or real dollar basis right in front of you. If asked, they can also take you step by step through the procedure.