What coverage do you need? – Forbes Advisor UK

Interested in purchasing life insurance? One of the first questions you’ll need to answer is: What coverage do I need? To help you solve this problem, we have created a calculator below.

Answer a few simple questions and we’ll suggest a coverage amount for you to purchase. You don’t have to take this number as read, however. You can decide to select more or less, depending on your situation and your budget.

How to use the life insurance calculator

Here is a step by step guide on how to use the calculator. Remember that the answer you get will reflect the information you provide. You may decide to select a different amount depending on your particular situation.

Step 1. Tell us how much money your dependents would need each year if you weren’t there anymore

If you and / or your partner are earning wages, your take-home pay would be a good place to start. If you don’t have a paid job but take care of the house and family, how much would it cost you each year to pay for outside help?

Step 2. Tell us how long your dependents would need financial support

The answer to this question will decide the “length” of your policy. Ideally, you should provide sufficient coverage until a time when you believe all of your dependents will be financially self-sufficient.

Stage 3. Tell us about any debt you have

One of the main uses of life insurance is to wipe out all the debts you have in one fell swoop so that it is not a burden on your family. Any outstanding mortgage in your name is the prime example, but don’t forget about other debts you may have, including those that may be in common name.

Step 4. Tell us about your probable funeral expenses

Funeral costs can reach several thousand pounds. In fact, according to Dignity Funerals, the current average cost is around £ 4,100. You may decide that you want a more expensive arrangement, so, as unpleasant as it may sound, it’s definitely worth including the sum in your calculation.

Step 5. Tell us about your savings and investments

If you have substantial savings or an investment portfolio, you may decide that these funds could be used to support your family if you were to die. This would reduce the amount of insurance you would need to purchase.

Step 6. Tell us about any existing life insurance you may have

You can have more than one life insurance policy, but if you already have coverage in place, it makes sense to take that into account when determining how much extra you need to purchase. Don’t forget about the “death in service” benefits you may receive from your employer if you are working.

Once you’ve entered all of the relevant information, the calculator will give you an idea of ​​how much life insurance you need. Armed with this information, you can begin to compare policies and their cost.