Blogger BlogNet2671

Have you ever wondered how much life insurance is really enough? Is there an urge to get more coverage because your worth is going up day by day? How about your investments? Where do they fit into the picture?

This article will solve your problems once and for all, regarding how much life insurance you really need, who it applies to and how you go about deciding, with or without the help of a financial expert.

With all the instability in the world, people from all walks of life, be it economic status or any other status, they require life insurance to protect their ability to earn an income.

The areas of uncertainty to focus will be premature death, disability and living too long though some would find that as a good problem. I belong to that category.

After years of research and paperwork, there is one way to find out the amount of life insurance needed to replace the income earnings. That is to multiply the yearly income by a number (researched). To replace five years of income, multiply annual income by 4.5. For ten years, the factor is 8.5. For twenty years, it's about 15. There is some uncertainty in this method but I have to agree it saves me a lot of time.

There is another method which is equally easy and more accurate based on what you really need, regardless of your future net worth. This method is also to prevent a person from putting aside excessive or too little money for life insurance. The method involves five steps.

1) Find out the total amount of available financial resources
Calculate the total amount of investments paid up, existing life insurance arrangements, sources of income, social security benefits, if applicable in your country as well as savings (minus three months of your average monthly spending).

2) Estimate the amount of money spent per year
Find out the amount of money you need to spend every year, including the bills, transportation fees, food, children's expenses, mortgage or rent, all borne by yourself. For instance, if you share by half your children's expenses with your wife, insert half your children's expenses into the total amount.

3) Find out the number of years your family will be able to rely without your income
Divide the existing resources available as discussed, by the total expenses per year. That will be the number of years your family can do without your income, should something unfortunate happen.

4) Calculate the number of years remaining to support your loved ones
Add this figure, to each of your main dependants' individual age. This will be figure "A" (Note that figure "A" refers to the figure calculated for only one of the major dependant, for easy explanation). Decide the average life expectancy for parents or spouse, and the coming of age for children. Usually, for boys, it is 25 and for girls, it's 22, the difference due to the need for military training in some countries.

Subtract figure "A" from the life expectancy or the coming of age of the specific person. This will be the figure required for this step.

5) Shortfall amount = life insurance amount required
Multiply the figure calculated in step 4 by the yearly expenses in step 2. That will be amount of shortfall to be replaced by life insurance, which is also the coverage needed.
Now that you know how to calculate the right amount of life insurance required, the only thing standing in the way is procrastination. Like food which is a basic need, one must have sufficient insurance so that he or she can live life happily without any worries or regret.

Benji is a Financial Consultant based in Singapore.He can be contacted via email at benfoo33@hotmail.com

Life Stages
Your insurance need will change as your life does, from starting to work to enjoying your golden years and all the stages in between. Each one of these stages may pose a different insurance need/cover for you. In this section, we have drawn up the basic life stages and help you analyze various insurance needs accordingly.

STAGE 1 : Young and Single

An important stage where one lays down the foundation of a successful life ahead. Take advantage of the time and power of compounding to ensure that you build up your dreams. Start saving early.

Your needs:

• Save for a home and wedding
• Tax Planning
• Save for Golden years

STAGE 2 : Just Married

Marriage brings about a significant change. New dreams and new opportunities also bring in additional responsibilities. While both of you look forward to a happy and secure life, it is equally important to ensure that eventualities don't come in the way of shaping your dreams.

Your needs:

• Planning for home / securing your home loan liability
• Save for vacation
• Save for your first child

STAGE 3 : Proud Parents

Once you have children, your need for life insurance is even more. You need to protect your family from an untoward incident. Ensure your protection umbrella takes into account the future cost of securing your child's dream. You will want life to go on for your loved ones, and having enough life insurance is a way to help ensure that.

Your needs:

• Provide for children's education
• Safeguarding family against loan liabilities
• Savings for post-retirement

STAGE 4 : Planning for Retirement

While you are busy climbing the ladder of success today, it is important for you to take time and plan for your life after retirement. Having an early start for retirement planning can make a significant difference to your savings.Think about your golden years even before you have reached them. The key is to think ahead and plan well using your time and money.

Your needs :

• Provide for regular income post retirement
• Immediate Tax benefits
• Lead a secure, independent and comfortable life style in your retirement years
• Choosing the right plan

Identifying the right plan basis your needs is the first crucial step towards insurance planning.

Analysing Needs...What is your need?

Protection
Need for a sound income protection in case of your unfortunate demise.

Investment
Need to ensure long-term real growth of your money.

Saving
Save for the milestones and protect your savings too.

Pension
Need to save for a comfortable life post retirement.

Once you have analyzed your needs as per above classification, you need to then ascertain important factors such as type of cover, insurance amount as per one's income, life stage and dependents. It is difficult to arrive at all these figures yourself. Our financial consultants can help you.

1. Ask Questions - Including specific questions in posts definitely helps get higher numbers of comments. I find that when I include questions in my headings that it is a particularly effective way of getting a response from readers as you set a question in their mind from the first moments of your post.

2. Invite Comments - I notice that when I specifically invite comments that people leave them in higher numbers than when I dont. To some degree this confuses me as most of my readers know that they can leave comments on any post - but I guess inviting a comment triggers a response to some extent. Also keep in mind that new readers that are unfamiliar with blogging dont always know about comments or how to use them - invitations to participate in well laid out and easy to use comments systems are good for helping them participate.

3. Interact with comments left - If youre not willing to use your own comments section why would your readers? If someone leaves a comment interact with them. This gets harder as your blog grows but its particularly important in the early days of your blog as it shows your readers that their comments are valued, it creates a culture of interactivity and gives the impression to other readers that your comments section is an active place that you as the blogger value. As the activity in your comments section grows you may find you need to be slightly less active in it as readers will start to take over on answering questions and creating community - however dont completely ignore your comment threads.

4. Be Open Ended - If you say everything there is to say on a topic youre less likely to get others adding their opinions because youll have covered what they might have added. While you dont want to purposely leave too many things unsaid there is an art to writing open ended posts that leaves room for your readers to be experts also.

5. Set Boundaries - I noticed that shortly after I set the rules for my comments section (with a comments policy) that my comment numbers jumped up a little. Im not sure if it was just a coincidence or whether readers responded to knowing what was and wasnt acceptable. Its just a theory but I think a well managed and moderated comments section that is free of spam and that deals with well with people stepping out of line is an attractive thing to readers. I personally dont mind people expressing different opinions to one another in comments but when I sense things are getting a little out of hand and too personal I often step in to attempt to bring some order to the situation (I rarely delete non spam comments). I find that people have responded to this and that comment threads generally stay constructive as a result.

6. Be humble - I find that readers respond very well to posts that show your own weaknesses, failings and the gaps in your own knowledge rather than those posts where you come across as knowing everything there is to know on a topic. People are attracted to humility and are more likely to respond to it than a post written in a tone of someone who might harshly respond to their comments.

7. Be gracious - Related to humility is grace. There are times where you as the blogger will get something wrong in your posts. It might be spelling or grammar, it could be the crux of your argument or some other aspect of your blogging. When a someone leaves a comment that shows your failing its very easy to respond harshly in a defensive manner. Weve all seen the flaming that can ensue. While its not easy - a graceful approach to comments where you admit where you are wrong and others is right can bring out the lurkers and make them feel a little safer in leaving comments.

8. Be controversial? - I put a question mark after this one because it doesnt always work (and I personally avoid it as much as I can these days) - but theres nothing like controversy to get people commenting on your blog. Of course with controversy comes other consequences - one of which is the risk of putting off less vocal members of your readership.

9. Reward Comments - There are many ways of acknowledging and rewarding good comments that range from simply including a good comment remark through to highlighting them in other posts that you write. Drawing attention to your readers who use comments well affirms them but also draws attention of other readers to good use of your comments section.

10. Make it Easy to Comment - I leave a lot of comments on a lot of blogs each week - but there is one situation where I rarely leave a comment - even if the post deserves it - blogs that require me to login before making a comment. Maybe Im lazy (actually theres no maybe about it) or maybe theres something inside me that worries about giving out my personal details - but when I see a comments section that requires registration I almost always (95% or more of the time) leave the blog without leaving the comment that I want to make. While I totally understand the temptation to require registration for comments (combatting spam in most cases) something inside me resists participating in such comments sections. Registration is a hurdle you put in front of your readers that some will be willing to leap but that others will balk at (the same is often said about other comments section requirements that go beyond the basics). Keep your comments section as simple and as easy to use as possible.

So - what do you think? How have you increased the levels of comments on your blog (had to ask)?

copyright http://www.wonderland-freemall.blogspot.com