Life Insurance Calculator

One of the best decisions you can make is the purchase of a life insurance policy.  While death is not necessarily a pleasant topic, it is an important one.  Today, more and more families are seeing the importance and value of life insurance, choosing to provide loved ones with protection and security even after death.  There are many different types of life insurance, not to mention varying amounts.  As you will discover, the more knowledge you have the easier the process of choosing will be.

Keep in mind when looking at the different types of life insurance, each company has a different view.  Therefore, to find the right coverage, the right amount, and for the best price, you should shop around.  Of course, you want to choose a reputable company but one that will work with your specific needs and budget.  Yes, life insurance costs money but again, this investment is one always worth making.

The following are the four different types of life insurance policies that you will consider.  Then, to determine the amount of coverage for each of those types, you can use an online life insurance calculator.  This calculator will ask for specific information from you and after keying it in, you will be provided with a good estimate.  From there, you can meet with a professional insurance agent or financial advisor to get down to business.

Adjustable Life Insurance

If you want lasting protection for your family, this is one of the more popular types of life insurance.  In this case, you can change the amount of premium when needed.  In addition, you would have the ability to increase or decrease the actual amount of the policy and if you wanted, you can even change the duration of protection.  The only thing to keep in mind is that if you decide the increase the amount of the policy, you would have to go through an evaluation to confirm that you are still an insurable party.

Universal Life Insurance

As a slight variation to whole life insurance, this is one of the types of life insurance that serves a dual purpose, being both an insurance policy and a savings account.  Over time, this particular policy earns interest at the current rate.  For the coverage, you would pay an annual premium, a portion of that that goes toward a managing fee.  In this case, any of the funds that are not used in paying the policy would be qualified for tax deferred interest.

Another factor is that with universal life, the amount of the premium can change.  You would determine the amount of money you want to go toward the policy and how much would go into the savings portion of the package.  The key here is that the amount of money in the savings account has to always be enough to cover the life insurance premium.  If not, your monthly payments could use the cash value, placing the policy out of sync from a value perspective.

Of all types of life insurance, this one comes with two distinct options.  First, the benefits could remain the same even if no changes are made by you, the policyholder.  Second, in addition to the cash value of the policy, the death benefit would always remain the same as the original value.  The only real risk is that if inflation increases, you could end up paying more in interest.

Universal Variable Life Insurance

Also called a “flexible premium variable” policy, this is another one of the many types of life insurance.  In this case however, there are features of the investment and those in a universal life insurance policy.  In other words, as the policyholder, you would be able to decide if you want the premium to go higher or lower.  Additionally, this type of life insurance policy lets you determine the way in which your cash value would be invested.

In this case, there is no guarantee on your cash value.  This means that the cash fund is valued based on the current market worth.  The negative aspect with this type of life insurance policy is that a $25,000 policy might drop to $20,000 overnight if the market were to drop.  While there are some advantages, types of life insurance such as this comes with risk.

Variable Life Insurance

The first of the types of life insurance is variable life.  This is a permanent policy whereby you as the policyholder to focus your premium on one or more investment funds if you like.  Funds such as this could be a number of things such as stocks, bonds, fixed income investments, money market funds, etc.  Usually, the investments can be changed up to five times every year but the exact amount would depend on the insurance company.

The downside to variable life insurance is that there are risks involved.  This means depending on a number of factors, the policy could increase or decrease.  In other words, if the funds go up, the policy goes up but if the funds decrease, so does the policy.  Even so, upon death, the benefit of the policy would never fall lower than the amount of the purchased policy.  Some people like this option in that they get to decide where the money is invested.