If you are in the process of taking out a life insurance policy to act as a financial safety net for you and your loved ones, one of the questions you might have is how much cover do I need?
Using a life insurance calculator can give you an estimate of what will be the right cover to meet your needs. But before you settle on the amount you think will be best suited to cover your needs there are a few things to consider.
Assess your needs
Before reaching out to an insurer or using an online calculator to estimate how much life cover you need, it is crucial to assess your current needs. While these may change in the next few years, understanding how much you will need to cover all your needs is vital. Factor in costs such as daily living expenses, any debt you may have, medical expenses, educational expenses, or future expenses that you would like to have covered.
Calculate how much you and your loved ones will need to comfortably survive within a year. Take your salary and multiply it by 180. Use the answer to subtract the value of your assets to find out the estimate of how much you should be insured for to make sure that you and your loved ones are adequate. You can also make use of our life insurance calculator to find out how much you will need. You could also reach out to us by requesting an obligation-free quote to get a more accurate quote.
What would you like your policy to cover?
Thinking ahead can also help you assess how much life cover you will need. While you may have existing expenses, consider other expenses you would like to have covered, even in the event of you passing on. Think of what you would like the payout to be used for. For example:
Paying bills
Managing daily expenses
Paying off debt
Education fund
Handling funeral expenses
Paying off the bond
Sustaining your family’s current way of living
Managing medical bills
Protect what matters with a will
You can choose to specify what you would like to be done with your life insurance payout through a will to ensure that it gets used in a way that you see fit, especially if you have children who have not reached the legal age of 18 years old. Ideally, you would want to take out a legally recognised will when creating a life cover for you and your loved ones to avoid any conflict or misuse of your policy. There are many options when it comes to creating a will such as creating one online with MiWayLife, a financial institution or reaching out to a legal institute to have all your bases covered.
