Term insurance is a cost-effective and straightforward way of getting your life insurance. This requires a lot of considerations, such as your financial goals, your family’s needs, and future inflation, when choosing a plan. Based on this information, you can decide on the coverage amount that suits you the best.
However, manually calculating or approaching an agent every time with new information is complex and time-consuming. Fortunately, there is a simpler method: using free online calculators. Read on to learn more about these calculators and how to use them to your benefit.
Understanding a Term Life Insurance Calculator
A term insurance calculator is an online tool that can easily help you calculate the life insurance premium you must pay to get your policy benefits and the desired coverage amount. It considers factors like name, nationality, phone number, email ID, date of birth, gender, smoking habits, education, occupation, and annual income to let you choose the plan that best suits your life goals and needs.
How Does the Calculator Work?
Your mortality charge is one of the crucial factors that this calculator considers and is based on your age when buying the term plan. The term plan death benefit is a fee that your insurer charges when a life insurance policy is purchased to cover the costs of providing financial protection if you are no more.
This charge is estimated using a standard annual mortality charge table based on historical life expectancy data. Conversely, the mortality rate is your insurer’s estimate of how many deaths will occur among people with life insurance for a given age. In general, this mortality rate is lower for young and healthy people who are not working in a high-risk job.
Hence, the insurance premium rates differ for age groups, with young people given lower premiums. Here is an example to understand how this calculator works:
- A 25-year-old man earns 10 lakh annually and wants to purchase term insurance.
- He wants to purchase a one crore cover in a specific budget, but is unsure of the premiums.
- With the help of a term insurance calculator and entering the required information, he knows the amount he may have to pay as a premium.
How to Use the Insurance Calculator?
- Enter your name
Enter your full name as mentioned on official IDs, such as PAN or Aadhar.
- Choose your residential status.
Click ‘Yes’ if non-resident Indian (NRI), else select ‘No’.
- Choose your gender
Choose between male and female.
- Tobacco information
If you smoke, click on Yes, or else choose No.
- Date of birth
Using the date picker, enter your date of birth.
- Annual income
Select the range that best matches your annual income.
- Phone details
Enter your mobile details.
- Email ID
Mention your correct email ID, and your policy information will be mailed here.
- Wait for the premium amount.
Once you have filled in the required information, click on submit. It will show you some plans and their premium amounts. This will help you compare the policies to make an informed decision. While choosing the best policy, remember to check the waiting period in term insurance, which may differ between companies and policies.
Once you select your chosen plan, it will ask you to enter other details, such as:
- The desired life cover amount
- Desired tenure of the plan
- Premium payment tenure
- Premium payment frequency
- Benefit option
After entering the above information, you will see your premium amount. You can play with this calculator by changing the above details to determine your ideal coverage and premium amount.
Benefits of Using a Calculator for Purchasing Term Insurance
An insurance calculator is a powerful tool that can help you understand the amount you must pay to get the coverage you want. The other benefits are:
- Customisation flexibility
This calculator allows you to design your term plan according to your needs. You can choose your life cover, add riders to strengthen the cover, select payout methods, and set premium payment terms according to your financial goals.
- Efficient
The calculator takes only a few minutes to process the details, calculate the amount, and give you a quote, all free of cost.
- Find the right cover.
It considers different factors, such as liabilities, income, future goals, and lifestyle, and calculates an ideal sum to ensure your family’s financial security.
- Comparison
Using this calculator, you can easily compare different plans and their features, including the waiting period in term insurance, and find the most effective plan for yourself.
- Saves time
This calculator saves you time and effort manually calculating your premium amount.
Wrapping it Up
Using a calculator can be beneficial when you need to purchase a term insurance policy for yourself or your family. This calculator can be used to understand the amount you need based on your lifestyle and financial goals. By entering the required information, you can determine the premium you must pay to get your desired coverage and secure your family’s future.
