What is Term Insurance Calculator - Its Benefits and How to use it?

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All about Term Insurance Calculator

Buy Term Plan Now
  • 20th Jan 2020
  • 9,098

All about Term Insurance Calculator

All About Term Insurance Calculator

Term insurance is the most cost-effective and straightforward way to get a life insurance policy. However, purchasing a policy entails a significant amount of paperwork and calculation. To choose the right insurance plan, you need to keep in mind the family’s financial needs and future inflation. Based on this information, you can choose the amount of sum assured that is best as per your requirements.

Fortunately, you have an effective and simple method that can assist you in simplifying this time-consuming process. A term insurance calculator can be remarkably beneficial for determining your financial needs.
Read further to know the different types of term plan calculators and the factors that play a role in deciding your premium rate.

What is Term Insurance Calculator?

A term insurance calculator determines the premium rate you will have to pay regularly to secure term insurance. The premium amount to be paid depends on several factors like your age, health record, the sum assured, and the policy term. The term plan premium calculator helps you learn the future needs of your family and choose the best plan available in the market to fit your budget.

Benefits of Term Insurance Calculator

  • Comparing plans

A term insurance premium calculator helps you compare various  term plans  for absolutely no cost. An agent would charge for creating several plans with varying premiums, but a term plan calculator does it for free without much hassle.

  • Cost-effective tool

This online calculator is cost-effective as you can use it multiple times without paying any additional charges. The calculator isn’t complex and determines your premium within minutes.

  • Saves time

The tool saves you a lot of time as it loads smoothly and is easy to operate.

1. Term Insurance Premium Calculator

This type of calculator gives you the premium rate for buying a term plan at a specific age and for a particular amount of coverage.

2. Investment Plan Calculator

Investment plan calculator gives you an analysis of your investments and predicts your growth.

3. Child Insurance Calculator

This calculator gives you the premium rate for buying insurance for your child to secure their future requirements like primary and higher education.

4. Pension Plan Calculator

A pension plan calculator aids in understanding the premium amount you have to pay today for a fixed amount of returns in the future and understanding the financial needs of your family in a better way. You can also compare the plans offered by other insurance companies and buy the plan that best suits your retirement plans.

The Working of a Term Insurance Calculator

Before you start calculating the premium rate for term life insurance, you should go through the various types of term insurances provided by your insurer to better predict your premium cost.

Step 1

First, you have to fill in your personal details like gender, smoking habits, age, the sum assured, policy term, etc.

Step 2

In the next step, you are presented with the payment option, the premium term, and you can choose the premium you want. A table with a monthly and yearly premium option shows the premium rate against the sum assured.

Step 3

You can add rider benefits like critical illness rider, accidental death rider, waiver of premium rider, etc. Adding any rider to your insurance plan will increase your premium rate by some amount.

Step 4

Now, you can view the final quote for premium and check if it fits your budget. You can also go back and re-calculate the sum assured with the help of the calculator

Factors That Affect Your Term Insurance Premium

Though the sum assured of life insurance can be the same, the premium rate depends on numerous factors and plays a huge role in deciding the cost.

1. Age

Your age is a crucial metric in the premium quote which is why it is advised to buy insurance when you are younger, As you grow old, the premium rates keep rising. At a younger age, you can get a good term plan at an affordable cost.

2. Coverage amount

The coverage amount also decides the premium where a higher cover means a higher premium

3. Gender

Though gender should not have much control over the price, insurance companies use statistical data to determine the life expectancy of the two genders. This can mean that one of the genders can tend to have a higher premium when compared to the other. Generally, female policyholders are more likely to pay higher premiums.

4. Policy Term

The policy term means that you have coverage for that many years, and it can be chosen by you. For term insurance, the premium rates are lower when the term is longer. Hence, if you choose a longer policy term, you can get a less expensive premium.

5. Purchasing mode

You can buy term insurance offline as well as online. When you buy the insurance policy offline, you have to pay for the agent along with the policy, making it an expensive option.

As you can see, term insurance calculators are useful tools that may save you a lot of time and money. So, you should not compromise your family’s financial security when you have a nifty little tool that can assist you. Therefore, before buying a term insurance policy in the near future, make sure you consult a term plan calculator. It has the potential to make your job infinitely easier and provide you and your loved ones with an adequate cover to keep you both safe and protected.

- A Consumer Education Initiative series by Kotak Life

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