Term Insurance Calculator: 5 Easy Steps to Calculate Term Insurance Premium

Term Insurance Calculator

Purchasing a term insurance plan in India best suited to a person’s insurance needs can be a daunting process for those new to insurance instruments. Moreover, as per the Statista Research Department, India’s insurance penetration & awareness levels in 2019 were only 2.82 percent, which is quite low compared to other developing nations.

Hence in order to ease the hindrances in understanding the differences between the abundance of term plans available in India, there are resources available online like the term insurance calculator that can help simplify the process. In order to use these resources in the ideal way possible, one should identify their personal assets and income margins so they can get a correct approximate with regards to a plan which serves their investment and insurance requirements.

Term Life Insurance Meaning

A term insurance policy is the most basic type of life insurance, and it is meant to offer protection to the insured person for a certain period of time. Since it is an uncomplicated, pure life insurance product, it is also one of the most affordable financial instruments available for getting long-term life security.

A term insurance calculator is an online tool that allows a person to get an estimate of the life coverage they require based on their income, age group, lifestyle habits and other personal factors. Using the term insurance calculator, one can see variations of the premium prices by adding different riders to the base cover as well.

Understanding your premium liabilities before investing money in an insurance plan can help you plan other financial responsibilities as well. Other than this, the term insurance calculator will also show you different premium payment methods and the corresponding amount, so you are aware of the available choices and can make an informed decision.

Now that you have understood term life insurance meaning, let us walk through the steps on how to use a term insurance calculator:

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  1. Step 1: The first thing you need to provide to use a term insurance calculator is basic personal information such as your age, gender, annual income and smoking habits. It helps build a profile of the policy buyer and a suitable life cover amount is displayed by the calculator. These factors heavily influence the sum assured and the premiums of the policy.
  2. Step 2: The next step will ask the potential policyholder to fill in the details of any existing life insurance plan they may already be having. In the event that they do, they can fill in the assured coverage amount in this field. This helps the term plan premium calculator to choose plans that can work alongside an existing expense on the policyholder’s end and is not too financially straining while also considering the coverage they expect from the same.
  3. Step 3: After proceeding to the next step, one has to enter their approximate coverage requirements in the term insurance calculator. This should be done after having analyzed one’s human life value prior to calculating their projected premium. This is an essential step, as it helps navigate a policyholder through their assets and loans and gives them better visibility in regards to their financial choices.

If a policyholder opts for a term plan that does not cover and extends at least eight times beyond their human life worth, the coverage amount will be insufficient to fulfil the policyholder’s financial responsibilities as well as any additional expenditures that the beneficiaries may be unable to meet. This can lead to unnecessary distress.

  1. Step 4: In this step, one will have to specify their preferred length of the policy tenure. Tenure of coverage is usually the time for which the policy will be valid and cover the insured and their beneficiaries. A term plan’s policy duration is generally longer than that of most ordinary insurance policies. The duration for most term plans in India may range somewhere between 25-30 years; however, one may choose to stay insured for a period that extends up to their retirement as it is during that time that a person is more prone to ailments or financial stress.

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  1. Step 5: Once all aforementioned steps are completed, one can click on ‘Continue,’ where the next window in the term plan premium calculator will be showing the standard premium amounts across different term insurance plans determined on the basis of their details and requirements.

Term insurance calculators designed expressly to calculate premiums might assist potential policy buyers in their quest for the best coverage to meet their needs. In addition to this, it also enables policyholders to make a more efficient financial plan as they have a clear idea of their premium liabilities. When you have carefully assessed your needs, the next thing to focus on is choosing a credible insurance provider.

Renowned insurers such as Max Life Insurance offer reliable term insurance calculators on their website which you can use without any hassle to calculate your life security needs.

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