how much can you afford per month?
San Diego, CA (Vocus) November 16, 2010
The first question people seeking term life insurance policies typically ask themselves is, "How much do I need?" While it's easy to pull a number out of thin air and make it sound like the right total, there is a smarter and safer way to arrive at the correct amount of coverage: it’s based on your numbers. Based on its experience helping over 5 million clients, Matrix Direct has developed a term life calculator to help you properly plan and provide for the security of your family or beneficiaries.
Essentially, a term life policy should provide for your beneficiaries' anticipated needs for up to 15 to 20 years, or even longer depending on your particular situation. But the total should be determined by more than a simple rule of thumb such as "annual salary x 10.” There are a myriad of variables -- on both the expense and income sides of the equation -- that could impact your planning.
On the one side are expenses, some of which are fairly predictable--e.g., a mortgage or car payment. However, there are many more expenses that are certain to fluctuate, like the cost of fuel or tuition.
Additionally, there are unexpected costs that will likely emerge, such as major car repairs, illness, and other events. The rising cost of living should be factored into planning your coverage total as well.
On the other side is income. Your salary would probably not simply stay level over the course of 20 years, nor would that of your spouse. Additional changes in income could also arise, for example, from retirement, a change in tax status, and other similar factors.
A plus most people don't consider on the income side is interest from the term life payout. Often, a life insurance payout is made immediately and in a lump sum. Put into the proper account, these funds would accrue interest over time. This is, of course, a good thing, and it also directly impacts the amount of coverage you require.
With all these variables to consider, it can be very easy to get bewildered. But trusting in the numbers can make it easy--if you know how to "crunch" those numbers. Matrix Direct--a term life insurance leader for nearly 20 years--has created a sophisticated, yet easy to use term life calculator that helps you "crunch the numbers" to get a clear picture of what may truly lie ahead.
This calculator can be found and used for free online at Matrix Direct.com
There are other tools out there, but you'll find they most typically approach your needs by starting with "how much can you afford per month?" Matrix Direct is taking the long-run into account, and starting with how much your family will need and building on that.
About Matrix Direct:
Matrix Direct, Inc. is one of the country’s leading life insurance agencies. Since its inception in 1995, over five million Americans have contacted Matrix Direct for a free life insurance quote and Matrix Direct has placed more than $123 billion of life insurance in force. Visit http://www.MatrixDirect.com or call 1-800-421-8832 for more information or to request a quote for term life insurance.
Matrix Direct, Inc. is a subsidiary of American General Life Insurance Company (AGL), Houston, TX and an affiliate of The United States Life Insurance Company in the City of New York (USL), NYC, NY. Agency services provided by Matrix Direct Insurance Services in CA (#0B57619), ME, MA, and OK; Matrix Direct Insurance Agency, Inc. in UT; and Matrix Direct, Inc. in AR(#246412) and all other states, except SD.