# What Is Your Life Insurance Based On The Easy Method? 3 Awesome Kinds Of Insurance!

Suppose your annual income is \$35,000, what is your life insurance based on the easy method? For middle-class incomes, it is highly preferred to have term life insurance. However, your choice should not only rely on your income. Other factors may affect your policy choice.

Contents

Buying insurance means that you have to meet the expenses you require. You will have to list down your costs and total them together.

Then add a little bit more extra sum for financial use in the future. At the same time, you have to consider your income and assets and see if you’re capable of paying for them. The thing is that \$35,000 is not too little but not too many either, which means you have to be practical and logical when choosing the policy that will serve you the most benefit but will not damage your budget at the same time.

## What Insurance To Choose Based On The Easy Method?

What if your annual income is \$35,000, what is your life insurance based on the easy method? The easy method is an insurance calculation technique that can determine your life insurance requirement. It is performed by a series of mathematical equations needed to answer your 7 years’ worth of wages at 70%.

This is a highly recommended method for middle-class income families, with an annual gross income of approximately \$35,000- \$99,000, with no more than 3 children and are all in healthy conditions, plus stable jobs for both the mother and the father. You take your annual income and multiply it by 70%. The product will then be multiplied by 7, which is equivalent to the number of years. The overall total would be the life insurance requirement needed with that income.

Taking into account that you have \$35,000 multiplied by 70 percent, you’ll have \$24,500. Let’s say you have that for 7 years more; you’ll need \$171,500 for insurance.

## The Three Insurance Policies To Consider

You can consider three insurance policies if your annual income is \$35,000, and you want to know what your life insurance is based on the easy method.

### #1. Term life insurance

The term life insurance, from the root word ‘term,’ refers to a policy set for a specific duration of time, usually in decades. This does not require the insurer to be dead. The moment the contract reaches its deadline, the insurance will be released. There are ways to renew the contract, of course. You can add more years into the clause until you find your policy necessary for use. Term insurance is usually used for children. For college funds, educational finances, or debts must be paid off in a specific time period.

Life insurance is the most low-cost type, making it perfect for middle-income families or those earning \$35,000 a year. This way, you can spend some money for your future, but it won’t negatively affect your daily budget. If there is a downside, it’s the fact that insurance returns for term policies are not as huge as the permanent ones. Also, since the contract is specific to a certain period of time, there won’t be as much time for the interest to grow.

Not to mention, a shorter time period may be a foolproof plan to lessen the risk of debt, maintenance can be costly. If you do want to extend your term, you’ll have to pay more. Typically, the rates for extensions get higher every time.

Further, understand which of the following best describes term life insurance.

### #2. Permanent life insurance

Permanent life insurance holds to its name. It is permanent. You’re basically set even until after you die. You’ve lived a stable life, and you’ll pass on this fulfillment to the future generation. This policy gives out stability and comfort. Whether you die tomorrow or live to centuries, you’ll always have a setback since permanent policies handle your financial matters even after death. You are also given many years to let the money grow annually. At the same time, permanent insurance can also let you borrow your own money for present needs.

The cons of a lifetime policy, however, is a far costlier starting balance. Since it provides more benefits and a lifetime of interest growth, you’ll have to risk more money.

But, you can also be comforted with the idea that you’ll no longer have to keep paying in case you want to have an extended period. This policy is also recommended for middle-class families since it is a much stabler option. However, you may have to save a bit more to avail this. Trust us, though, and it’s just as worth it as term policies.

### #3. Convertible life insurance

This is basically a combination of the previously mentioned policies. You may start out with the term insurance if you have low capital and when you’ve saved up enough, you can convert it to the lifetime insurance policy.

This way, you can gain the benefit of starting insurance despite having a smaller income but also gain the luxury of switching to stable and convenient permanent insurance when you’ve achieved enough funds. However, be aware that you’ll have to pay a bit more when switching to a much more expensive program. Understand how to estimate life insurance.

## Conclusion

Given that your annual income is \$35,000, what is your life insurance based on the easy method? Have you chosen yet? Keep weighing the pros and cons and deciding which policy is better for you in the long term. Choose wisely!