Digital, online technology has made some essential, laborious tasks from the past almost unrecognisable from how they were traditionally performed. Acquiring life insurance is no exception. The online experience has revolutionised the process, almost entirely to the advantage of potential policyholders. A life insurance calculator is another tool that makes the task more manageable, faster, and more straightforward.
Finding an online life insurance calculator is an excellent way for clients to gain insights into the information they will eventually be required to provide when purchasing a life insurance policy and how much they should expect to pay.
How does a Life Insurance Calculator Work?
Once your chosen life insurance calculator has all the information it needs to provide an estimate, it offers an accurate picture of your recommended coverage and costs. The results are a guideline and will not necessarily be honoured by insurance providers but put you in a more knowledgeable position and prepare you for the upcoming process. Some of the decisions you will need to make and the information required include:
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Annual income
Any life insurance provider needs to know how much they can expect to pay your beneficiaries if the worst happens, and your regular income is a critical part of the equation.
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Investments and savings
Divulging the details of all your savings and any investments available to your dependents also plays a crucial role in the calculation and recommended coverage.
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Outstanding debts
Before being offered a life insurance policy, applicants must provide details of their existing debts, including mortgages, vehicle loans and payments, and credit card debt, among others.
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Predicted future expenses
If you are preparing to face significant expenses in the future, like tuition fees, second home purchases, and others, those details are required.
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Existing life insurance policies
Any life insurance policies held by the same applicant must be declared.
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Estimated final expenses
An online life insurance calculator may ask you to estimate your funeral/burial expenses.
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Regular payments or a lump sum?
When you pass away, a life insurance policy will provide your beneficiaries with regular financial instalments or one substantial payment, as you prefer. There are pros and cons to each method, and seeking professional financial advice is recommended if you need assistance making the best decision for your loved ones.
Do I Need to Use a Life Insurance Calculator?
A life insurance calculator is an optional but highly recommended step in the process of sourcing life insurance quotes. You will need to gather the same documents and information to use a life insurance calculator to generate binding online quotes anyway, and it is a relatively fast, efficient process that provides a lot of useful information.
Although a life insurance calculator provides practical insights into your ideal life insurance policy, it is a tool to use in your comprehensive investigation, research, and policy comparisons. You will still need to turn to online comparison sites and eventually contact shortlisted insurance providers to clarify the details and secure a binding, valid quote.
Using a Life Insurance Calculator: Final Thoughts
Life insurance is a powerful financial tool for all adults, especially those with dependants. A life insurance calculator focuses your efforts in the early stages and provides a clear view of recommended coverage and potential costs. It is a fantastic, decision-assisting guide before you consult with potential providers.
