How much is enough? There's no pat answer, but a good way to come up with your baseline numbers is by doing some quick calculations on the Web:
- " Analysis of Your Life Insurance Needs " offers handy tools that offer the two chief methods--income replacement and needs fulfillment--of estimating life-insurance levels.
- " Life Insurance Needs Calculator " is simple: Just click on "How much life insurance do you need?" and you're transported to a spiffy and detailed calculation tool.
- Download a free spreadsheet (available for Excel, Lotus or Quattro)
- Calculating required disability insurance coverage levels is even trickier, but get your thinking started by reading " How Disability Insurance Works "
Curious about how many more years you're good for? Find out by playing The Longevity Game , which asks you a handful of questions, then provides the scientific best guess for the number of years you've got left. Created by insurer Northwestern Mutual Life, this game hinges on the same tools used by actuaries in setting rates.
Buying insurance may not be as fun as calculating your life expectancy, but at least the Internet makes it fast and painless. Plentiful Web sites are proliferating where comparison shopping can be done with just a few keystrokes and mouse clicks.
- InsWeb : This site is easy to navigate, and it offers lots of information on term-life policies for sale.
- Quotesmith : This top-rated site offers instant, online quotes from up to 500 insurers nationwide.
- InsuranceCompany.com : Fill out the worksheet and you'll get a fast quote for disability coverage.
Here's another idea: If you attended college, ask your alumni association if it offers group life and disability policies. Many do, and because these are group-based, premiums can be just pennies. These policies often aren't the most comprehensive, but if you want bare-bones coverage on the cheap, alumni associations can offer the best deals around.