The 1960s was a boom time for life insurance agents in the United States of America. Life insurance had become hugely popular and there was a spurt in life insurance sales. In that period, communication was not as highly developed as it is today and public awareness was not much. The result was that people relied more on insurance agents who were the people who held the key to the enigma called life insurance.
Over the next forty odd years until the early 21st century, the insurance agents had a monopoly over dictating the choices to be taken by policyholders. However, one development that took place during this period was the development of what is today known as the life insurance calculator.
Insurance agents have always used insurance calculators from the very early days when the concept of selling insurance policies began. The early insurance calculators were however quite crude and more often than not would be just a bunch of papers containing handwritten charts and tables. These charts and tables would contain values to show customers about how regular premiums would convert into monetary benefits.
Today however, with the internet at our fingertips, there are numerous life insurance calculators available. These calculators are country-specific and there is a wide range to choose from with particular reference to American life insurance. This means that today we do not have to rely solely on the judgment of insurance agents but we can check their decisions by using the freely available calculators on the internet.
Insurance calculators which are available do the work of pages of calculations requiring just a few values to be entered. The basic function of the life insurance calculator is to derive the amount of coverage needed in life insurance considering the person’s age today and assuming the expenses which will be incurred in old age for the policyholder. It also defines the money that will be available to the survivors after the death of the policyholder. These calculators go into the smallest details and even account for the funeral expenses of the insured person. The outputs are not restricted to just text. Graphs and charts are produced which provides a graphical representation of the outputs. The entire system is interactive, thereby allowing the person to go into various permutations and combinations and arrive at an ideal figure for an acceptable level of insurance coverage.
What is even more useful to the potential customer is that some of these calculators will take the outputs one step further and provide a form to be filled. This form gets forwarded to a preferred insurance provider in the U.S. In this way the calculator actually bridges the gap between the policyholder and the insurance provider.
However, the recommendations of the calculator must be carried out on the sole discretion of the person who is about to take a policy. What if they do not have any dependants? In such a case even taking a life insurance policy would not be recommended. Therefore it is up to the policyholder to make the final decision on the most practical.
Today insurance calculators are available which give the values on and excel sheet with charts inserted. This is very good for people who want to try various scenarios to eventually arrive at the optimum coverage. This sort of calculator is not only a boon for the layman who wants to review options but it also a very effective tool for insurance agents who can input their customers’ values and come up with the most attractive offers.
The usual form of life insurance calculators take three basic categories of a person’s personal finance. First and foremost, income and assets are taken into consideration. On this basis outstanding debts and regular expenditure is charted out. Then finally the long-term liabilities are dealt with such as children’s education and other miscellaneous expenses of bringing up a family. Several other categories might include retirement plans and income protection requirements in the case of illness or redundancy. These are variations which will differ from provider to provider.
A final word – while life insurance calculators are readily available for the U.S., the final decision rests on the individual to use a calculator which takes into account the specific needs of that person.