Easy Steps to Calculate Term Insurance Premium
The first and foremost step involves filling up all the necessary personal information that the term insurance calculator asks you for, including age, gender, annual income and whether or not you harbour a tobacco consumption habit.
If you already own an insurance policy, you may also input the current life cover that you have been guaranteed by the policy.
Once you have provided your personal information, the next step is to specify the amount of sum assured or life cover that you would like your family to receive as a part of the policy agreement.
Specify the duration for which you would like the policy coverage to be valid for, which could be anywhere from 10 to 50 to even 80 years depending on your plans for the future.
Once all of the above information has been input in the term insurance calculator, click on the “continue” button, upon which you will be shown a series of different plans that are aligned with the personal details and specifications that you provided.
Choose the plan that perfectly fits your preferences, both from the perspective of the premium that you need to pay and the coverage that it offers.
Benefits of Term Insurance Premium Calculator
Some of the many benefits that come with using a device that helps you personalize and customize your choice of insurance policy include the following:
Save up on time
Instead of having to find the right policy from the vast digital ocean of possibilities, a term insurance premium calculator makes it easy to choose a policy that perfectly fits your needs with just a few clicks.
The term insurance premium calculator offers you the ability to filter out policies that perfectly fit within your budget and also offer the sum assured that you are looking for, thereby enabling you to save up immensely as compared to making a bad buying decision.
Compare plans before buying
The term insurance premium calculator shows you numerous plans that have been curated as per the personal preferences that you specify. This helps you to compare premium and coverage options before buying, making your purchase decision much more valid and relevant to your personal lifestyle.
Factors Considered when Term Insurance Premium is Calculated
Your Insurance Requirement
Your premium is mainly dependent upon the Life cover/sum assured that you are looking to gain from your policy.
Being a primary factor for term insurance, premium amount tends to increase based on your age.
Choosen Policy Term
As a rule of thumb, the longer the term of an insurance policy, the higher the premium will be.
Gender plays an important role in determining premium owing to the differences in lifestyles as well as life expectancy that comes with this facet.
Higher premiums are associated with occupations that involve a large degree of risk on a daily basis, such as fire-fighting, oil rig management, etc.
Premiums are usually lower for policies bought online owing to the ease and simplicity associated with the dispensing of a policy to the customer via this method.
Term Insurance Calculator FAQ's
How do I know how much sum assured/life coverage I need for a term insurance?
The life cover that you need is dependent on some crucial factors, most of which are derived from the future financial plans that you have for yourself and your family. When considering life cover, factor in aspects such as your average monthly expenses, your liabilities or debts, and existing wealth. Moreover, also consider whether you want to create a retirement corpus in the future, while also considering all the major events that are in the pipeline in the coming future, such as weddings, children’s higher studies, etc.
How is sum assured calculated?
If you want to calculate the approximate sum assured that you are looking to get out of your term insurance policy, first consider your current expenses and add any existing liabilities such as loans and debts to it. Next, you need to subtract any disposable assets from this amount. Once this is done, you need to think ahead and consider expenses that may be incurred due to imminent and unavoidable life events and goals, such as weddings, anniversaries, vacations, higher studies, etc.