Some items overlooked when calculating life insurance needs

Jul 29, 2011

Mortgage loans are among the expenses to be considered when deciding on life insurance coverage levels

A report says when some Americans sit down to determine how much life insurance coverage they need, they often don't include some commonly over-looked expenses.

Policyholders may need to account for a few unforeseen expenses when determining their life insurance needs, John Napolitano, CEO of U.S. Wealth Management in Massachusetts, wrote in the Patriot Ledger. These matters include household expenses, such as the cost of replacing an appliance or maintaining the property, many of which are not considered and can be hard to calculate. In addition, the expert advised consumers estimate a high rate of inflation and a low rate of earnings on their savings and investments. That will reduce the chances of underestimation, he said.

"From here, the calculators will tell you how much of a lump sum in cash is needed at your death. Subtract your current savings and investments - and that shortfall represents your life insurance needs," he wrote.

Financial planners can provide consumers direction when it comes to calculating their life insurance needs. Additionally, shopping for life insurance quotes online can help them find the most affordable rate.

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