We already know that insurance is very important for us and our families. For example life insurance. There have been many cases where a family was greatly assisted by life insurance funds when, for example, the father died. So the funds from life insurance can be used to meet the necessities of life, education funds for their children, his wife's business capital, and others for the family.
If someone already understands, and decides to buy insurance, there will be questions. How much life insurance funds should I prepare? Actually there is no limit on how much life insurance a person must prepare. But we can start with 2 approaches :
1. Based on ability
2. Based on needs
Through these two approaches you can decide how much life insurance you should prepare. Maybe I can explain as follows:
1. Based on ability
You can prepare life insurance based on your current financial capabilities. Adjust to your financial condition. Don't interfere with other family expenses. Set aside a few percent of your salary, for example 10% to buy life insurance. You can upgrade the amount of life insurance later if your financial condition begins to improve along with your family's lifestyle.
2. Based on needs
If you decide to buy life insurance according to your needs, there is an easy way to answer the question "how much life insurance funds should I prepare?". The trick is to determine how much your living expenses will be in one month. Then you multiply by twelve months. After that, you divide it by the amount of interest at your local bank. Then you will get how much life insurance is ideal according to your needs. If something happens to the insured person, for example death. Your family can place these funds in a bank that has interest as you calculated. So from this interest your family can use for living expenses for 1 year. For subsequent years, the same can be done. Maybe you have another way to calculate how much life insurance is for you, you can try it. Because what I'm conveying here may only be one of many easy ways on how to prepare life insurance according to your needs
So, those are the two approaches we can use to prepare our life insurance. The sooner you decide, the sooner you and your family will gain security in terms of family finances.
