TPD Insurance Calculator – What factors are considered?
TPD insurance should be an essential part of your financial plan for your good as well as that of your family.
However, you may be wondering “How much TPD insurance do I need?”
This is a valid question, and one that influences the kind of policy you go for as well as the cost of the cover. The amount of coverage you get should be sufficient to take care of your needs and those of your family, as well as pay off any debts .
There is no particular amount of TPD coverage that would be appropriate for everyone read more. A TPD insurance calculator is an online tool that is designed to help you come up with a coverage amount that would be suitable for your particular circumstances based on certain factors including:
Your annual family expenses
Depending on your family’s lifestyle, it should not be difficult to determine your family’s annual expenses since it would be based on the kind of expenses you currently have. However, you would probably have to estimate how much you would spend on other essential requirements such as medical costs, which may not be a regular expense. The calculator should also factor in the modification costs for your home and the medical expenses that may be incurred as a result of disability, as well as the cost for ongoing treatment.
Your children’s fees
If you have children, an estimate of how much they would require in college fees for the future should be provided when using a calculator. A comprehensive calculator would even allow you to provide estimates for each child’s college fees depending on the school most likely to be attended.
Certain debts are typically included when using a calculator. They include your mortgage repayment balance, credit card debts, car loan and investment loans. Depending on your particular circumstances, the calculator should also allow you to enter the value of other debts you may owe.
Your additional sources of income
If you have other sources of income apart from your paycheck, this would help to offset your expenses and will therefore lower the coverage amount you would need. As such, a calculator will also require you to enter the value of any savings you may have as well as assets you would probably sell off in case you became permanently disabled. Note that a lower coverage amount will also lower the cost of the policy. Read: How to Refinance your Car Loan with Bad Credit
Ultimately, an insurance calculator will provide an estimate of the amount of TPD insurance you should get based on your family’s lifestyle, your children’s education and your level of debt. You could also get a comprehensive calculator that provides an insurance amount based on a combined insurance. For instance, a life and TPD insurance calculator would help you determine how much coverage you would need for a combined life and TPD insurance policy. It is important to be as accurate as possible when entering the different values in an insurance needs calculator in order to get an estimate that would reflect a proper coverage for your circumstances.