This is a pretty smart life insurance calculator.
Inflation & Interest
First, the calculator factors in inflation. Let's say that you had to pass away today, your spouse would need $ 500,000 or life insurance coverage.
Well, here's the problem…
Due to inflation, your spouse may need twice the amount as today if you passed 15 years from now.
Next, the calculator also factors in interest your beneficiary will earn on the death benefit proceeding. As long as we assume your spouse is "stick it under the mattress", we can assume they'll earn some interest on the money, right?
And by adding this interest to the calculation, your spouse's money will last longer, meaning you may be able to get by with less coverage.
Life Insurance for Supplemental Retirement Income
As indicated by the aforementioned LIMRA report, you may be interested in life insurance NOT for its coverage, but to grow a cash value and future income stream.
If that's the case , you are less concerned about how much you need (making this calculator less important), and more about the best life insurance policies for cash value growth and future income.
If that is your primary concern, I recommend you start your search using our term vs whole life insurance calculator.
Life Insurance for Estate Planning
Now let's say you have a large estate, and may need life insurance to pay for estate taxes or to provide liquidity to your heirs
In that case, our income replacement calculator won
Some additional considerations when determining how to use a property planning attorney and CPA to calculate (and possibly mitigate) your tax liability upon death. much life insurance you need are:
- Time Left to Retirement ̵
- Spouse's Income Potential – If your spouse does not currently work, he or she would be able to if need be? What is his / her income earning potential based on experience and education?
- Consider Your Debt – It's common to purchase life insurance to cover a mortgage, credit debt, or business loan. Consider how long the term of payments is. If your mortgage is paid off in 30 years, you really need whole life coverage? Consider Your Savings & Investments – If you are saving money, add to your 401K or IRA, etc., and your debts are as mentioned in # 3, your need for insurance may greatly diminish in a short period of time.
Huntley Wealth Life Insurance Calculator
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