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How do I Calculate My Term Insurance Premium

How do I Calculate My Term Insurance Premium
  • 22nd Jun 2018 |
  • 8,772

Out of the numerous life insurance options available in the market, term insurance is one of the best-suited options for those looking to cover themselves for a fixed period. A term plan, as the name suggests, provides insurance for a specified period. In case of an unfortunate death during this period, the policyholder’s beneficiary is entitled to receive the sum assured amount, as per terms and conditions of the policy.

Benefits of a term plan

The importance of a term insurance plan cannot be articulated. A term plan helps a family recover from the financial loss associated with the death of a loved one. Your family may use the sum assured amount to meet financial obligations such as payment of an existing debt, household expenses, child’s educational fees, and other lifestyle costs, among others. Besides the policy acts as an income replacement in case you were the sole breadwinner of the family.

Moreover, a term insurance policy allows you to enjoy higher sum assured amount at the lowest premiums. Additionally, you may avail of tax benefits under the Income Tax Act, 1961. Under Section 80C, you may reduce your tax liability in proportion to the premium amount paid. Additionally, the maturity amount may be claimed as a tax deduction underSection 10(10D). This is applicable to term plans with the return of premium option. With such benefits, one definitely cannot undermine a term insurance policy.

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About term insurance calculator

Insurance providers these days offer a wide range of term plans, with varied features and benefits. It is necessary to compare such plans and choose the one that meets your coverage needs. A term insurance calculator is a great tool that helps you select the most economical and best-suited policy.

Calculate Premium

A term insurance calculator is a digitized tool that helps you calculate the premium amount based on the desired sum assured amount. Most insurance providers have an insurance calculator on their website. By entering basic details about yourself and the policy, you may easily determine the term insurance premium that you need to pay.

An insurance calculator offers a host of benefits.

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benefits of a term insurance calculator.

1.Saves time

Manual calculations are a time-consuming process. Besides, the figures may be large, and calculations may, therefore, take a longer time. A term insurance calculator, however, helps save ample amount of time. You may simply fill in the necessary details and get a quote within minutes.

Kotak General Insurance, a well-known insurance provider, has an insurance calculator on its website. You may use the Kotak term insurance premium calculator to generate your quote quickly.

2.Quick comparisons

In the conventional mode, you may need to visit agents from various companies to select the best policy. However, an online insurance calculator helps you compare various insurance plans on a single platform. You may compare the sum assured offered against the premium paid, and make a choice from among multiple insurance providers.


In today’s highly competitive world, insurance providers offer customers with a host of benefits. Some insurers even allow customization of plans based on the customer’s coverage needs. Insurers provide alluring discounts online to help attract customers. You may, therefore, use a premium calculator to determine the most cost-effective plan. You may also make your purchase online and enjoy lower premiums. Insurers offer lower premiums due to reduced cost of paperwork and non-involvement of intermediaries.


Human beings are prone to make errors. While performing the task of manual calculations, you may unknowingly make a calculation error. This, in turn, may affect the calculation of the premium amount, which may affect your purchase decision. A term insurance calculator, however, provides accurate results. As it is a digitized tool, you are rest assured of getting the insurance quote free from any mathematical error.


Quite contrary to the popular notion that insurance calculators are difficult to use, the same is not true. The process is quite simple and it will help you get a quote easily. You may simply follow the below-mentioned steps to get a quote from a term insurance calculator.

  • The first step is to fill in basic personal details. This includes information about your age, gender, income, and occupation, among others. It is also necessary to furnish information about the preferred mode of payment. You may choose from among various options such as demand draft, check, Electronic Clearing System (ECS), credit card, or net-banking facility.
  • Once you have provided basic personal details, you may now furnish information about the term plan. For this, you may enter the sum assured amount, premium-paying term, the term of the policy, and the desired frequency of premium payment. You may opt for a single payment or on a regular basis such as monthly, quarterly, half-yearly, and annually.
  • Upon successful entry of these details, the calculator will display the premium amount. You may then go ahead and purchase the term plan.

Determinants of a term insurance premium amount

The premium amount rates of a term plan vary from individual to individual. Along with the risk factors, insurance providers determine the premium amount based on numerous other factors.

Basic determinants of the insurance premium amount:


Your age is one of the most important aspects that is taken into consideration while determining the premium amount. Lower the age, lower is the premium and vice versa. Individuals in the lower age group carry a lower risk as compared to those in the older age group. Older individuals have a greater risk of being prone to the occurrence of the insured event due to their declining health.


Another determinant of the premium amount is the nature of work. Gas industry workers, miners, soldiers, and those employed in dangerous occupations carry a greater risk than those working in offices such as teachers or shop workers. Those working in safer environments, therefore, pay a lower premium amount.

3.Lifestyle habits

Most insurance providers ask applicants to provide details of their health while filling the insurance form. Those with good lifestyle habits tend to live longer than those who do not. You may, therefore, avail of lower premium rates in case you do not have any bad lifestyle habits.

4.Medical history

Your past medical history along with your family medical history is another major determinant of the premium rate. In case you have suffered from any illness or disease in the past, your premium rate may increase. Besides, in case you have a family history of life-threatening diseases, chances are that you may get affected in the later stages of life. This, in turn, would affect your term premium amount.

Besides the aforementioned factors, other aspects that have an impact on the premium amount include your gender, geographic location, financial status, and the number of dependents, among others.

A term insurance plan provides the much-needed protection in case of an unfortunate event. Therefore, it must be a part of your financial portfolio. By investing in such a plan, you may enjoy peace of mind knowing that your family’s needs will be taken care of, in case of an unfortunate event.

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