Calculate the Right Life Insurance Cover


of 8
All materials on our website are shared by users. If you have any questions about copyright issues, please report us to resolve them. We are always happy to assist you.
How much life insurance cover do you really need? Calculate the right cover for you in 3 simple steps!
  • 1. Calculate the RightLife Insurance CoverGet the right life insurance cover in 3 steps!Powered by
  • 2. The Human Life Value (HLV)approach to calculating lifeinsurance requirementsaccounts for 4 factors:• Annual income• Annual expenses• Number of years to retirement• Inflation-adjusted cost ofexpensesHuman Life ValueThe HLV figure you arrive at should help you make a reasonably accurateassumption of the value of your income.
  • 3. Step I• Your Annual Income =salary+bonus+employeebenefits+income frominvestments.• Deduct your personalexpenses (food, clothes, travel,etc) from the above.• What is left, is what yourfamily consumes per annum.
  • 4. Step II• See how many years are left tillyou retire.• Project family expenses uptoretirement, allowing for reasonableincrements.•Subtract any pension benefitsyour family gets upon your death.•Add non-recurring expenses, likeyour children’s higher education.The shortfall of the below mentioned expenses is the amount that you shouldinsure yourself for.
  • 5. Step III• Calculate the shortfall’spresent value, allowing for areasonable rate of inflation.• Factor in your existinginvestments by deducting yournet worth and accounting forany big-ticket loans, to arrive ata reasonable HLV figure.
  • 6. Know Your Life Cover Needs• The HLV figure you arrive atshould help you ascertain theamount of life insurance coveryou need.• Since HLV is a moving target,keep reviewing it every 5 years,at the least.
  • 7. Thank YouGet the right life insurance cover in 3 steps!Powered by
  • 8. This 2-Minute Learning series isbrought to you by