How Life Insurance Calculators Work
If you're thinking about getting life insurance to protect your family, a life insurance calculator is handy to use as you begin your research. Life insurance calculators are free online tools that ask an individual simple questions before providing an estimate of how much a life insurance policy would cost on a monthly basis.
You can check out AIG Direct's free life term insurance calculator to try it yourself. Here's why life insurance calculators are helpful and the typical information you'll need on-hand to fill out a life insurance calculator.
Benefits of a Life Insurance Calculator
Life insurance is not a one-size-fits-all solution. Depending on where you are in your life and the types of family relationships you have, your life insurance needs may differ drastically from other individuals.
For example, a life insurance policy for a young woman in her 20s with her first child may look very different from a life insurance policy for a gentleman in his late 40s whose kids have already moved out of the house. Where you are in your career, how many more years you plan to work, the number of dependents you have, the assets and debts you have, and other factors will affect your life insurance quote so you can optimize your policy.
Using a life insurance calculator before you seek out a quote can be helpful. Going through the free life insurance calculator process gives you more information that can help during the life insurance purchasing process. A life insurance calculator gives you a better idea of how much coverage you may need and for how long, so you're prepared when you talk with a representative for a quote.
Life Insurance Calculator Components
You can fill out a life insurance calculator in just a few minutes. In most cases, you'll already know the information that is required to fill out the calculator.
Age
Generally, the younger you are when you apply for life insurance, the better chance you have of locking in the lowest rate possible. When you're younger, it's more likely there is more time before the life insurance provider will have to pay out benefits. That enables you to lock in a lower rate.
Employment
What you're making in your current career is linked to what your loved ones will be missing if you pass on. Knowing approximate annual income gives a life insurer a better idea of the policy amount to recommend.
Family
If you're married and/or have dependent children age 18 or under, there will likely be people who will be missing out on your support if you pass on. Life insurance provides protection for however many dependents you have.
Outstanding Debts
Outstanding debts like a mortgage payment, college loans or car loan will all need to be paid off, including when you've passed on. Your life insurance should be able to cover whatever debts you leave behind, so your loved ones aren't burdened with them.
Family Income Sources
Your family may have other income sources that offset how much life insurance coverage will be needed if you pass on. Factoring these in can lower your life insurance costs, since you know there will be funds available.
Financial Investments & Assets
In addition to your work income, your overall wealth may be able to be used to provide financial support for your loved ones. Adding these into a life insurance calculator helps create a more accurate view of the policy that will work for you.
Other Policies & Annuities
If you have annuities or another life insurance policy in place, like a personal one or one through work, that may affect your new life insurance policy recommendation.
Additional Life Insurance Factors
When you do request a life insurance quote, there may be some additional questions asked of you. Be prepared to offer up additional info like:
- Gender, which affects life expectancy
- Whether or not you're a smoker
- Health, which may require an medical examination to check for height, weight, blood pressure, cholesterol and other health indicators
- Lifestyle choices, including whether or not you participate in high-risk activities like skydiving or work in a labor-intensive industry like transportation or mining
- Family medical history
- Driving record
Your information regarding these factors may or may not affect your policy. It's always best to be honest, because if a life insurance company discovers you were lying about information, the company could void your policy or not pay out your benefits.
Contact AIG Direct for a Free Life Insurance Quote
If you know you need life insurance, a conversation with an AIG Direct representative can help. We can learn about your needs more in-depth to make a personalized recommendation for you and your family. Call 800-294-4544 or request a quote online.
