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Term Insurance Calculator

(Find your ideal term insurance coverage to protect your loved ones.)

A term insurance calculator is a quick and easy tool that allows you to calculate the premium amount on a term insurance policy.... It incorporates variables from age, coverage amount, policy duration, and medical conditions for a precise breakdown about premium amount, aiding you in making informed financial choices. So, if you are also looking to know what is term insurance and how to calculate term insurance premium with this efficient and time-saving online tool, we’ve got you covered with a step-by-step breakdown. Read more

What is a Term Insurance Calculator?

A term insurance calculator is an online tool designed to help individuals estimate the amount of life insurance coverage they need based on various factors such as age, income, liabilities, and financial goals. By putting these details into the calculator, users can quickly determine the appropriate sum assured for a term insurance policy that would adequately protect their family's financial future in case of the policyholder's demise during the policy term.


These calculators often provide insights into premium amounts and policy durations, aiding individuals in making informed decisions about their life insurance needs without requiring extensive manual calculations.

How Does a Term Insurance Calculator Work?

A life term insurance calculator is significantly beneficial in estimating the premium you need to pay for a term life insurance policy. Wondering how it works? Here’s the complete breakdown:


Step
1
Input Your Details
The first step is to provide accurate personal information, which includes your date of birth, gender, marital status, annual income, number of children, desired life cover, and possibly details about smoking habits.
Step
2
Specify the Desired Sum Assured
After that, specify the amount of sum assured desired and the duration for which coverage is needed.
Step
3
Compare Plans
Once you click submit, the term insurance premium calculator will suggest a few suitable term insurance plans that align with the information provided. Conduct a systematic comparison of the recommended plans to identify the most suitable option.
This charge is estimated using a standard mortality charge table which is based on the historical data on life expectancy.
Moreover, mortality rate is another factor that influences the premiums. Generally, lower mortality rates require a lower premium.
Now, let’s analyze the working of the term insurance plans calculator with the help of a real-life example:
  • Suppose Priya, a 32-year-old woman, wishes to secure a family’s term insurance plan.
  • Priya is earning 12 lakhs per annum and wants to buy 1 crore worth of life insurance within a specified budget. But she is confused about how much premium she will have to pay to manage her finances effectively.
  • She goes online and uses a premium calculator for term plans by entering required details such as her age, income, and preferred coverage.
  • The term insurance calculator instantly shows Priya the precise payable premiums, helping her choose the right policy that aligns with her requirements and budget.

The Importance of Term Insurance Calculators

In today’s digital age, making financial decisions has become smarter and more efficient, thanks to tools like term insurance premium calculators. These handy online tools take the guesswork out of selecting the right coverage, ensuring you make an informed choice tailored to your needs.

Personalized Planning

A term insurance calculator helps you customize your policy based on age, income, liabilities, and future financial goals. Instead of a generic plan, you can fine-tune your coverage to ensure your family’s security aligns with your unique lifestyle and responsibilities.

Budget-Friendly Approach

Affordability is a key concern when buying insurance, and a term insurance calculator allows you to determine how much coverage you can get within your budget. By adjusting the sum assured, tenure, and premium payment frequency, you can find a plan that offers maximum benefits without straining your finances.

Informed Decision-Making

Understanding the various premium structures and benefits is crucial when purchasing a term plan. A term insurance calculator provides clear, data-driven insights, eliminating confusion and helping you make a well-informed choice that suits your financial planning.

Time-Efficiency

Gone are the days of lengthy policy comparisons and manual calculations. With a few clicks, a term insurance calculator instantly provides premium estimates, saving you valuable time and effort. This quick process lets you focus on evaluating the best options rather than getting lost in complex calculations.

Comparative Analysis

Choosing the right term plan often requires comparing multiple options. A term insurance calculator lets you compare different policies, analyzing factors like premium costs, coverage benefits, and additional riders. This comparative approach ensures you select a policy that best suits your needs.

How Does a Term Plan Calculator Help You?

A term insurance premium calculator assists in determining the necessary insurance coverage to financially safeguard your family members and calculate the corresponding premium amount. According to a general guideline, the coverage should adequately meet your family's financial needs in the event of an unexpected occurrence. Term plan calculator ensures that your insurance choices are grounded in clarity, accuracy, and foresight, ultimately providing peace of mind for you and financial protection for your loved ones in times of need.


Step-by-Step Guide to Use the Term Insurance Calculator

Using the online tool to calculate term insurance premium is quite simple and straightforward. Here’s the step-by-step breakdown on how to use the term insurance calculator:


Step
1
Enter the Full Name
Enter your full name as per your official IDs, such as PAN card, Aadhaar card, etc.
Step
2
Confirm Your Residential Status
On the dropdown menu, select ‘Yes’ if you are a non-resident Indian (NRI), otherwise, select ‘No’.
Step
3
Select Your Gender
Next, select your gender from a given list of options.
Step
4
Select Smoking Habits
On the dropdown menu, select ‘Yes’ if you smoke, otherwise, select ‘No’.
Step
5
Enter your Birth Details
From the date picker, select your date of birth.
Step
6
Provide Your Annual Salary
Choose a range that best matches your annual salary.
Step
7
Provide Your Phone Number
Enter your phone number in the denoted field.
Step
8
Provide Your Email Address
In the denoted field, enter your email address.
Step
9
Review Your Premium
Once you fill all the mandatory fields, click submit, and the term policy calculator will show the estimated premium along with various suitable policy options.

Benefits of a Term Plan Premium Calculator?

Term Plan Premium Calculator offers a range of benefits that simplify selecting the right coverage while ensuring financial prudence. Here are the key benefits of using a term plan premium calculator:


Convenience

One of the primary benefits of a term plan premium calculator is the convenience it offers. Calculating the necessary coverage and premium manually can be complex and time-consuming. A term life insurance calculator streamlines this process by allowing you to input your details and instantly receive accurate estimates. You can explore different coverage options and premium amounts from your home without visiting multiple insurance providers or spending hours researching.

Comparison

You can quickly generate quotes from various insurance providers by entering your details into the calculator. This lets you compare premium amounts, coverage benefits, and additional features. The ability to compare multiple options helps you make an informed decision, ensuring you choose a policy that offers the best value for money and meets your needs.

Financial Planning

Effective financial planning is crucial for ensuring the long-term security of your family. A term plan premium calculator assists in this by providing a clear picture of the costs associated with different insurance policies. It helps you understand how much coverage you can afford and the monthly premiums, allowing you to budget accordingly. This clarity ensures you choose a term plan that fits your overall financial strategy without compromising on necessary coverage.

Customization

Every individual’s insurance needs are unique, and a one-size-fits-all approach rarely works. A term life insurance calculator allows for customization based on your specific circumstances. You can adjust variables such as the sum assured, policy term, and additional riders to see how they affect the premium. This flexibility helps you tailor your insurance policy to your exact requirements, ensuring that you get comprehensive coverage that aligns with your financial goals and obligations.

What Happens When you Don’t Use a Term Insurance Calculator?

A term insurance India calculator plays an important role in choosing a plan that aligns with your budget and coverages needed. The precise estimation of the premiums to be paid with this tool can significantly enhance your financial planning along with ensuring you get comprehensive coverage with any add-ons, such as critical illness cover .


If you don’t use a term insurance calculator, it can have the following consequences:

  • You may end up choosing a higher premium that does not fit your budget and further impact your finances.
  • Moreover, by only considering the lower premium, you may save a few bucks but may end up getting inadequate coverage, which leads to frequent out-of-pocket expenses in the future.

What Are the Different Types of Term Insurance Calculators?

Term insurance premium calculators can be classified into various types based on the policy and coverages. Here is the list of different types of term plan premium calculators:


If you don’t use a term insurance calculator, it can have the following consequences:


1. Regular Plan Term Insurance Calculator

This type of calculator provides the most affordable premiums with the highest life cover and the longest tenure of the policy.


2. Return of Premium Term Insurance Calculator

This type of calculator is significantly helpful in calculating the premiums of the Term Return of Premium plans. The TROP plan returns the premium paid throughout the policy at the end of the policy term.


3.Housewife Term Insurance Premium Calculator

This type of calculator provides the estimated premium amount for non-working women. Housewife term insurance plans are curated specifically to offer financial assistance to the family of housewives in their absence.


4.Saral Jeevan Bima Term Insurance Calculator

This type of calculator estimates the premium amount for a small life cover that typically starts at ₹5 lakhs.

Impact of Term Insurance Premium Calculation on Smokers

If you are smoking on a regular basis, the insurance provider may categorize you as high-risk individuals. This means that you have to pay higher premiums in comparison to a non-smoker for the same term insurance plans.


Smoking increases the risk of developing various life-threatening diseases, such as cancer, cardiovascular diseases, etc., and thereby prompts the insurer to increase the payable premium amount. This can be calculated with the premium calculator for the term plan.

How Occupation Impacts Term Insurance Premium Calculation?

Various high-risk occupations, such as firefighters, pilots, construction workers, etc., are expected to pay higher premiums for the insurance coverages. This increase in rates is due to high potential risks in the workplace due to accidents or health hazards.


Moreover, the self-employed are also more likely to pay higher premiums than salaried individuals due to their unsteady source of income.

Factors that Affect Term Insurance Premium Increase

When it comes to term insurance, your premium is not just a random number. It is carefully calculated based on several key factors. Let us break down what influences the cost and what insurers charge more or less depending on your profile.

1. Age

The younger you are, the lower the premium. Why? Because insurers see younger policyholders as less risky and with longer life expectancies. The older you get, the higher the premium, as the likelihood of health issues increases.

2. Health Condition

Your current health plays a major role. If you have pre-existing conditions like diabetes or hypertension, expect a higher premium. Insurers may even require medical tests to assess your health before finalizing the policy.

3. Gender

Statistically, women tend to live longer than men, which means they generally pay lower premiums. Conversely, men often face higher premiums due to a shorter average lifespan and health risks.

4. Smoking Habits

If you smoke, brace yourself for a significant premium hike. Smoking is linked to multiple life-threatening diseases, making smokers riskier to insure. Even occasional smoking can push your premium higher.

5. Occupation

Not all jobs carry the same risk. If you are a pilot, firefighter, or construction worker, your premium will be higher than someone with a desk job. Riskier occupations mean a greater chance of an accident, leading insurers to charge more.

6. Lifestyle Habits

Do you love adventure sports? Do you frequently travel to hazardous locations? Your lifestyle choices impact your premiums. High-risk hobbies like scuba diving, skydiving, or mountaineering can increase rates.

7. Chosen Sum Assured

The higher the coverage amount you opt for, the higher your premium. This is because the insurer takes on more financial responsibility in case of a claim. A ₹1 Crore cover will naturally cost more than a ₹50 Lakh policy.

8. Premium Payment Tenure

Your premium structure also depends on how long you choose to pay. If you opt for a shorter tenure, you will pay higher installments. Spreading payments over a longer period can make them more affordable but might increase the total cost.

At What Age Should I Opt for a Term Plan?

You can purchase a term insurance policy anytime between the ages of 18 and 65, but there are compelling reasons to get one sooner rather than later. If you secure a plan in your 20s, you are likely in good health with minimal risk of severe illnesses. Insurers recognize this and offer lower premiums, making it a cost-effective choice.

Moreover, buying early ensures financial security for your loved ones right from the start. Term insurance plans also provide flexibility, allowing you to tailor coverage as your needs evolve. They also come with tax benefits under Section 80C of the Income Tax Act of 1961 , making them a smart financial move.

Check Out Our Other Calculators

Financial well-being starts with a plan. You can check out more financial tools and calculators to get a head start on your financial journey

FAQs on Term Insurance Calculator

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    Tax Benefits:

    You may avail of tax benefits under Section 80C and Section 10(10D) of Income Tax Act, 1961 subject to conditions as specified in those sections. Tax benefits are subject to change as per tax laws. Customer is advised to take an independent view from tax consultant.

    Section 41-

    Extract of Section 41 of the Insurance Act, 1938 as amended from time to time states: (1) No person shall allow or offer to allow, either directly or indirectly, as an inducement to any person to take or renew or continue an insurance in respect of any kind of risk relating to lives or property in India, any rebate of the whole or part of the commission payable or any rebate of the premium shown on the policy, nor shall any person taking out or renewing or continuing a policy accept any rebate, except such rebate as may be allowed in accordance with the published prospectuses or tables of the insurer. (2) Any person making default in complying with the provisions of this section shall be liable for a penalty which may extend to ten lakhs rupees.

    Section 45-

    Fraud and Misstatement would be dealt with in accordance with provisions of Section 45 of the Insurance Act, 1938 as amended from time to time. Please visit our website for more details: Read more about section38_39_45_of_insurance_act_1938.

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