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All about Life Insurance Calculators

Before making a purchase, an individual can evaluate several plans using the life insurance premium calculator tool. A term insurance premium calculator assists potential buyers in choosing the best life insurance plan for their needs.

  • Jan 14, 2020

An online term insurance premium calculator needs to be the first thing that you look for after making up your mind about buying a life insurance plan. The calculators are also something most seek to know if an insurance policy fits the budget before buying it.

Key takeaways

Crucial Factors that Decide the Rate of Life Insurance Premium

  • Age
  • Health
  • Gender
  • Sum Assured

Benefits that Life Insurance Calculator offers

  • Cost-effective option
  • Convenient solution
  • Easy comparison of plans

To better understand a life insurance premium calculator, let’s look at how you can use it, the benefits of the calculator, and the factors that decide your premium.

What is Life Insurance Calculator?

A life insurance calculator helps determine the amount of premium you will have to pay regularly for a certain insurance plan. There are factors like your age, health, tenure of the plan, the sum assured, rider benefit, and the plan chosen by you to decide the exact premium amount.

What is Life Insurance Premium?

A life insurance premium is a recurring or a one-time lump sum payment made to the insurer to secure an insurance policy. You must pay your premiums regularly for the insurance plan to stay valid. You can choose the frequency for the payment, which can be quarterly, monthly, half-yearly or yearly, according to your convenience. The amount of premium that you decide on also plays a role in determining the sum assured to be received on maturity.

How does a Life Insurance Calculator Work?

Users of the term plans with the return of premium calculator are prompted to enter a few details to obtain an estimated premium cost for the chosen insurance coverage. Your annual income, projected years of employment, anticipated personal expenses, and estimated yearly growth in income are all requested.

Age, gender, date of birth, kind of term insurance, length of the policy, and intended payout are also taken into consideration. A few other factors are also taken into consideration, including the user’s lifestyle and whether or not they smoke.

Tips to Reduce Life Insurance Premium

Online Purchase

Premiums for life insurance policies purchased online are comparatively less than purchasing life insurance policies offline as it requires no additional premium cost of purchasing them directly from the insurance company.

Avoid Consumption of Tobacco/Alcohol

Health is considered the most important factor when calculating the premium for life insurance. The premium rates for non-tobacco/alcohol consumers are lower than those who consume tobacco/alcohol.

Choose the Best Possible Policy Term

The period of the whole policy term plays an important role in calculating policy premiums. Purchasing a life insurance policy for a longer period of time will result in lower premiums.

Add Riders If Required

Choose the riders wisely and opt for them only if you require them because additional coverage riders increase the number of premiums.

How to Use Life Insurance Calculator?

Most life insurance cost calculators ask you to select the plan you want to opt for on their website. You can view and go through the multiple plans to understand what suits your requirements before calculating the premium rate

Step 1: The first step is filling in your personal details as given below:

1.Age of the person

2.Gender of the person

3.Date of birth of the person

4.Marital status of the person

5.The annual income of the person

6.Number of children of the person

Step 3: At this point, you can add any rider benefits like critical illness rider, accidental death rider, premium waiver rider, etc. Your premium for the desired insurance plan will be visible on the screen.

Benefits of Life Insurance Calculator

A simple tool that makes it easier for potential insurance policy buyers to make educated decisions about their life insurance is the life insurance premium calculator. Some advantages of using a life insurance premium calculator are listed below.

Cost-Effective Option

The online life insurance calculator doesn’t charge you and enables you to compare and assess the premium cost before buying it. You can also add riders to your plan to see if the insurance policy fits your budget.

Convenient Solution

The calculator is very efficient and convenient as you can go back to it again and again, which is not possible with an agent. The calculator is also available at all times, allowing you to use it without restriction. The steps for using it are easy and simple to follow if you are aware of the plan you want to buy

Easy Comparison of Plans

You can also use the life insurance premium calculator to plan and compare the various plans available in the market. With this, you are able to buy the best plan that suits your future needs.

Crucial Factors that Decide the Rate of Life Insurance Premium

The following elements are taken into account when calculating the life insurance premium.


Your age is an important factor in determining the rate of premium. If you are younger, you are likely to have a lower premium price when compared to buying an insurance plan at an older age. This holds true because there is a lesser number of claims at a young age.


Your health record helps the insurer understand the illnesses you have and the potential diseases that you can develop. You also have to undergo a medical test, but if you opt out of it, a higher premium can be charged by the insurer. Smoking and drinking habits also play a significant role in deciding the rate.


Insurance companies use statistical data to figure out the life expectancy of the two genders. Such a factor benefits one of the gender resulting in a lower premium rate.

Sum Assured

The sum assured chosen by you determines the premium rate, where a higher sum assured will mean a higher premium price.


The premium in the term insurance premium calculator increases if your lifestyle is risky, i.e., smoking, drinking, or consuming tobacco. If you smoke or drink often, which are regarded as dangerous behaviours in the life insurance underwriting procedure, the online term insurance premium calculator is meant to raise the premium or direct your proposal to the underwriter. The chance of death is high in the case of people smoking or drinking, or consuming alcohol; this increases the mortality ratio where people have these habits.

Hobbies / Occupation

The life insurance premium is also determined by the prospect’s line of work. Certain vocations are categorized as hazardous in the insurance industry and present a significant amount of risk for insurance companies in terms of mortality claims. Examples include people working in the chemical, firecracker, army, and police services. These occupations have higher mortality rates and, thereby, higher life insurance premiums.

Hobbies such as Scuba diving, Paragliding also attract the special attention of the underwriters as there is a high mortality ratio in people having these hobbies. After taking into account the prospect’s interests and professions, the life insurance premium calculator calculates the prospect’s premium.

Type of Policy

The major factor determining life insurance premiums using the term plan with return of premium calculator is the type of life insurance plans you choose. Life insurance policies come in a variety of forms, including term insurance plans, endowment insurance plans, child plans, pension plans, etc.

All these types of life insurance policies have different premiums, but all of them cover the life of the insured. It is advisable to opt for a life insurance company that provides better service and extensive insurance coverage at the most affordable premiums.

Other Types of Life Insurance Calculators

There are different types of calculators available on the official websites of life insurance companies, such as

  • Savings Amount Calculator
  • Human Life Value calculator
  • Body Mass Index Calculator
  • Child Future Calculator
  • Retirement Planning Calculator
  • Mortality Risk Calculator
  • Wealth Planning Calculator


Calculating the policy premium rates is a detailed process that term plans with the return of premium calculator support. For calculating the insurance premium, this online calculator takes a wide range of factors into account, including age, gender, sum assured, and more. An online tool can be highly trusted because there are no chances of inaccuracy as compared to manually calculating premiums.

While human error might be anticipated when calculating life insurance premiums manually, a calculator can be trusted to produce the most accurate results. Additionally, life insurance premium calculations also yield results in a matter of seconds, reducing the policy buyer’s work and time. As a result, using an online term insurance premium calculator is strongly advised.

Kotak e-Term

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  • Life Cover till 85 years for Life & Life Secure Option
  • 3 Payout Options
  • Special Rates for Women
  • Option to exit the policy with premium refund at the age of 60*
  • Special Rates for Non-Tobacco Users
  • Free Medical Check Up every 5th year**

Ref. No. KLI/22-23/E-BB/2435


- A Consumer Education Initiative series by Kotak Life

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