Here's How to Calculate Life Insurance Sum Insured. Many people who do not know how to calculate the sum assured life insurance. What is the calculation system like? When you are checking your family's balance sheet, you may classify assets in the form of homes, vehicles, pensions, or financial investments. Only, there are other elements that can provide benefits that can not be given by other assets. This asset is life insurance. Yes, life insurance is a form of financial protection provided by a life insurance company against a person (policyholder) against the risk of dying. Thus, the abandoned party (the insured) can still receive a certain amount of money, where the money can be used as living expenses by the testator.
Life insurance needs to be owned by everyone. In addition to providing protection against financial losses caused by the risk of uncertainty in life, life insurance can also support a happy and prosperous old-age plan. Before discussing how to calculate the sum insured, it is better as a prospective life insurance policyholders, you already have the following points. Economic value is a value where your income per year averaged in each month. Or for an employee is the amount of net salary brought home. For the interest of the sum insured, the focus is only on the economic value is not enough or not the salary. The existence of individuals other than you are very dependent on the economic value, eg wife, husband, children, older brother, sister or parents who have retired. Transport other party's funds in business activity, eg personal loan outside of bank debt or other financing institution that has no life insurance. The amount of sum assured has a minimum range equal to the amount of money the current specific needs (present value) multiplied by 150%. While the maximum sum insured is for the money in the future (future value) multiplied by 80%.
This method is absolutely combined with the investments made (either monthly or yearly) to achieve future financial needs of the financial needs. This method can also be used for those with very large monthly incomes. So the other two methods above can not be used again, because it will give the amount of sum insured is too big (unlikely sum assured approved by the insurance company).