You can use an online life insurance calculator to estimate how much your life insurance will cost. Most life insurance companies have a life insurance calculator somewhere on their website. Let’s take a look at some life insurance terminology that you might run across if you decide to use a life insurance calculator to estimate the cost of your life insurance.

Final expenses

The final expenses cost is the amount of money you will need to cover uninsured medical costs, funeral costs and inheritance taxes. Remember, funerals can get expensive in Nigeria. When using a life insurance calculator, be sure to provide a realistic estimate. If you underestimate this amount, your relatives might have to pitch in to cover the cost of your funeral.

Outstanding debts

If you have credit card debt or any other kind of debt, it will be passed along to your family unless you can cover it with life insurance. If you manage to pay down your debt later, let your insurance company know. Less debt means less money to put away each month toward life insurance.

Outstanding mortgage

Like other debts, your family will have to continue paying for your house if you don’t own it yet– unless you have life insurance that covers the cost of your mortgage.

Current savings and investments

This is the amount in your bank that your family stands to inherit after you pass. The more you have saved, the less your life insurance will cost. Total up the current value of any stocks, mutual funds, bonds or other assets to get the number you need here. Remember, current savings and investments doesn’t include retirement funds– only you are eligible to receive a retirement paycheck, not your family.

Spouse’s annual income

If your spouse is able to work and support your family after you die, your life insurance cost will be less. Be sure to be accurate here. If your spouse has been out of the workforce for years taking care of your children, it may take a few years for he or she to start earning a normal salary.

Term insurance

Term insurance is the cheapest option for life insurance out there. On the other hand, it only lasts for a limited period of time. If you die outside of the period specified by the term policy, the life insurance company doesn’t have to pay. Term insurance is a good solution for parents who want to make sure that if they pass, their children will be covered until they are old enough to work.

Permanent insurance

Permanent insurance is more expensive than term insurance, but it never expires. Permanent insurance also accrues a cash value. You can use the cash value of your permanent insurance as collateral to take out loans. In the event of a serious illness or injury, some insurance companies allow policyholders to withdraw money from their permanent insurance account. Check with your insurance agent to decide which kind of life insurance is right for you.