Step 1: Life and Disability Insurance

Some of us have too much life insurance and many more of us don't have any, or not enough.

Life Insurance is mainly used for Income Protection (loss of income due to death). No one should be without it. At any age, you should consider your individual circumstances and standard of living you wish to maintain for your dependents.

Before buying Life Insurance, make sure you understand the basics of Life Insurance and all of the different types available such as: Term, Whole Life, Universal Life, and Variable Life. Then make sure that the agent you are dealing with has your best interest in mind instead of just being commission oriented.

You can purchase guaranteed level term for 10,20, or 30 years at a pretty low price.

There is a wealth of information available on all of these types of insurance products in our Financial Directory of Resources including where to buy it and how much it costs.

This calculator will give you a pretty good idea of how much Life Insurance you really need. Reading the definitions is very important. You will need to refer to your Net Worth Statement and your Home Budget Analysis for some of the information. It is a real eye opener and worth your time to consider.

*Both the future expenses and future income totals are expressed as the amount of cash required today, invested at your expected rate of return, to equal the total future cash flow. For example, if you are expecting to receive $1,000 in exactly one year, that $1,000 has the same value as $909 today invested at 10%. Our totals show these current amounts to calculate the life insurance you require today to cover your future expenses after your future income is taken into account.

When we discuss the Emergency Fund, you will find that one cause of lost income is disability. You can insure yourself against this loss. Any income loss can be devastating if you are not financially prepared. This is one type of insurance that most consumers think they don't need or cannot afford. When disability does strike, you'll wish you were covered.

You may want to check to see if your employer has any disability coverage for employees and take this into consideration. This is covered under current monthly coverage in the calculator. Make sure that you read all of the definitions for this calculator. The calculator will figure out how much disability insurance you will need and the length of time you think you may need it.

One of the most common causes of income loss is through a disability. While most disabilities cause only temporary loss of income, any income loss can be devastating if you are not financially prepared. This calculator helps you determine how much disability insurance you may need to cover expenses during such a disability.