Categories: calculator

Life Insurance Calculator

The Life Insurance calculator helps you answer a simple but crucial question: How much insurance cover do you really need?

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How does the Life Insurance Calculator work?

The Life Insurance Calculator estimates the desired cover based on the needs-based or Expenditure method. It assumes that the Insurance proceeds will be used for the expenditure needs and meeting the liabilities of the insured.

Liabilities & expenses would first be met out of the value of investments and other assets (other than personal assets such as one residential house and personal jewellery that the insured person’s family will not want to sell even if the insured person dies). The difference between these figures constitutes the Insurance requirement. The current Insurance requirement will be calculated after deducting the existing life Insurance from this figure.

Assumptions

Life expectancy of the beneficiary (usually spouse) is taken as 85 years. You can extend this number for a more conservative life cover
Proceeds from the Life Insurance should be invested conservatively, so a 7% return has been assumed.
Inflation considered at 5%

Feel free to change this number based on your preference.

How to use the Life Insurance Calculator

The Life Insurance Calculator helps you answer a simple question – how much insurance cover do you really need?

It is essential to have a Term Insurance plan if you have dependents. While purchasing a Term Insurance Plan, you need to provide the Life Cover desired. This determines the value of the premium to be paid and needs to be determined accurately. A low value of the Life Cover would mean your dependents won’t be able to sustain the current lifestyle in your absence. A high value on the other hand, would mean you pay unnecessarily high premiums.

The Life Insurance Calculator helps you accurately determine the Life Cover needed.

Purchase a Term Insurance Plan

Disclaimer: Above products are provided as examples & not recommendations. Please do your own due diligence. Above information does not constitute financial advice.

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