I need life insurance and, if so, when?
One question that everyone who should be using the financial planning always ask the question, but how to calculate the answer? To determine whether a person needs life insurance one needs to be a very simple question. If I die someone will be financially worse?
In the question, "someone" actually refers to the burden of the family, not only, but can also mean lenders or partners, most of the world. So in other words, if you die and someone needs money as a result, you need to solve an insurance. So, before you can look at the protection of the family with the most common treatment for life insurance, the mortgage is a credit institution as a necessity company.
If money and dies, the lender is financially worse off all debt not to pay your loans and losing their money. So to the previous question, who will be in the event of his death worse. With that in mind, if you have a mortgage or say 110k too 110k would do well, life insurance, which are charged again and repay the loan to the lender in the event of his death.
As regards the protection of their relatives back in the previous question can be considered as people who could be economically disastrous drawn in the event of his death into consideration. I must also say, wants protected, since it operates to provide a lifestyle for them and they certainly want to continue this way of life, even if you do not keep around.
Unlike mortgage protection outside there is a fixed debt and therefore an insured fixed amount, take life insurance to protect your family is a little more complicated. This is mainly because the need is a little more difficult to quantify. To do this, you must first determine what is lost in the event of death. This is usually by presenting a similar amount carried out on revenue that is securely generated by the figure of life. For example, if you are on a 20k annual salary, then it would be wise to have a cover that could generate a lot of money in case of death. This can done by a job that pays an annual profit of 20k per year, or the organization of a plan that will generate a lump sum that can be invested to generate 20k plan.
If you organize insurance lump sum that you need to know the size of a lump sum is not required. Although developed many online calculators, you are to give an idea of how much is needed to generate an income for a fixed amount, not on the basis of assumptions about investment growth and inflation. However, he has for a flat rate taker for approximately a multiple of ten is not acceptable, what is required for income. So, in this example, a fixed life insurance is necessary 200,000k. Theoretically, this could in turn be invested 20k per year possible revenue in the future to generate.
So, in summary, the need for life insurance, which will be prepared by the reaction of even someone worse in the case of my death, and the required amount is defined by the setting of the amount necessary to cover the liabilities or lost amount in the case of death.
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