How to Calculate Your Insurance Coverage Amount Colorado

Steps

1. Search the web for a Life Insurance Calculator. It should take into account some basic financial goals and responsibilities that people have in their lives.
2. Identify each goal. Then assign a monetary value to the goal. Finally, pick a date at which this goal needs to be met. For eg.: Raj wants to pay for his son Ravi's education (goal name).This will cost approximately Rs 10 Lakhs in today's costs (goal amount). Ravi's education is planned for 2012 (goal date).
3. Identify your current household expenses. These will be the general level of expenses that your family needs to maintain its current standard of living For eg. Raj needs Rs 25,000 per month, or Rs 3 Lakhs per annum towards household expenses.
4. Identify the sum total of all your outstanding loans - home loans, car loans, personal loans etc. E.g. Raj has a car loan outstanding of Rs 2 Lakh and a home loan balance of Rs. 20 Lakhs. Total loans outstanding are Rs 22 Lakhs.
5. Enter your current age. E.g. Raj is 33 years of age.
6. Press Calculate button after filling all the above details.
7. Chart plotted at the end shows that if you die tomorrow, how the insurance proceeds amount that your family receives, will grow at risk free rate and help them finance their expenses and goals each year.

Tips

• Goal amounts and expenses that you enter are assumed to be growing at inflation rate. It is also assumed that your family will repay all the outstanding loans immediately after your demise.
• Your life expectancy has been defaulted to 80 years, you can change it from assumptions section.
• It is further assumed that if something happens to you, then your family will invest 'insurance proceeds' in a safe avenue , where this money will grow at risk-free return (can be edited from assumptions section).

Warnings

• Each individual's situation is unique. Therefore, please do not base your decision just on this calculator.

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