Being under or over covered in your life insurance coverage is not the best. Whether you are over covered or under covered, you lose money. You need to know how to determine the right amount of coverage you need and also make savings with free life insurance quotes.

Some simple way to arrive at a reasonable coverage amount have been suggested. This combines the amount you can conveniently pay in premiums and the amount covered for. You can like some people do, calculate what your family would require to live comfortably monthly and use this as a focal point. Another strategy is calculating your earnings for ten years. Some people use even more complex calculations. Here, let us look at a very simple way.

The first thing you need to know is how much your family would need in a month. This of course means that you would need to be reviewing your policy as your family needs changes. The birth of a baby is an example of an increase in a family’s monthly requirements. This method requires that the money paid to your family would be invested. Assuming you conclude that your family would need $2000 monthly to live comfortably, you need to find an investment vehicle that is low risk and can give a minimum return on investment. Here’s how it works. You find the investment plan, know the minimum return on investment let us assume it is 10% annually. You want that 10% to be your family’s yearly requirement which following our example would be $24,000. To get the $24,000 my family would nee yearly, I would need to invest $240,000 at a minimum return on investment of 10%. That’s it.

This explanation should be simple enough. Financial gurus may find this too basic. At least it does not have to be complicated to work.

I would look at some more recommendation that may help you.

Term life policy holders should ensure that they are not paying more than 5% of their monthly income as premium. For whole life insurance policy holders with cash value, it should not be more than 10%. Do not let all these figures and calculations confuse you. You have the option of discussing with a financial adviser who can help you come up with a plan tailor made for your financial situation and needs. There is no excuse for not having a life insurance policy. To get one at a very affordable rates, go for quotes comparison. Compare the affordable life insurance quotes you get from these comparison sites. You would get free life insurance quotes to help you find the best rates for the coverage you need.

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