In order to buy a term life insurance, it is highly imperative to narrow down the cost and affordability of the plan. Otherwise, it may just prove more of a burden than coverage to you in the long term. To ascertain affordability of term insurance plan, best method is to use a term insurance premium calculator which will definitely help you a great deal in sealing the deal.
What is Term Insurance Premium Calculator?
It’s an online tool which is designed to facilitate prospective insurance buyers with premium estimation. It is an easy to use tool which can greatly reduce the time and effort involved in otherwise manual calculation. You can easily check premiums for different sum assured values along with other variants and decide what works best for you.
Details Required for Using Term Insurance Premium Calculator
To use a term insurance premium calculator, you need to enter following details for the tool to process the calculation for the policy chosen:
- Name of the proposer
- Date of Birth
- Life cover required
- Policy term
- Premium payment term
- Whether a smoker or not
How to Use Term Insurance Premium Calculator
Using a term insurance premium calculator is a very simple task. Simply go through the steps mentioned further to use the tool:
- Visit the website of the insurance provider you wish to purchase the policy from
- Click on the term insurance calculator which may either be present on the homepage or at the particular plan page
- Enter all the details asked in the form like your name, date of birth, sum assured you need, policy term, etc.
- Once done with details, submit the same for the tool to go on with the calculation
Factors Affecting Term Insurance Premium Value
Term insurance is one of the most popular products prevailing in the insurance market premium of which is dependent on some factors which are variable. Let’s discuss these factors and how premium changes with change in them:
Age of the applicant: All things aside, your age majorly matters in estimation of the premium you will be paying to get the term insurance coverage. Younger you are, lower will be your premium. Similarly, if you fall in the higher age group, so will be your premium.
Sum assured: If you want to have more, you simply need to pay more. This logic also applies to term insurance premium calculation. Premium for a cover worth Rs.50 lakh will be higher than the premium for coverage of Rs. 30 lakh.
Gender: If you are a woman, you will be offered discount in the premium amount. Because of the basic difference in the body of females and males along with the difference in lifestyle they lead (basically smoking habits and alcohol consumption), women tend to pay less premium towards term life insurance.
Term of the policy: Is Mr. X buys a policy for 10 years while Mr. Y goes for 20 years, then the premium for Mr. X will be lower as compared to Mr. Y who has opted for 20 years of policy period.
Premium payment term (PPT): If the PPT is more, the premium will be low. This is because the total premium to be paid towards the policy will get distributed in a wider span of time. For e.g. if you choose for 20 years and someone goes for 30 years of premium payment term, you will end up paying higher than the latter.
Important Aspects of Using Term Insurance Premium Calculator
- When using this tool, keep following points in mind so as to get the best out of it:
- The premium values calculated by the tool are indicative in nature and not actual
- You should always provide correct facts so that you get the closest estimate
- Use the calculator for different values of sum assured as this way you will get the best measure of plan’s affordability
Advantages of Term Insurance Premium Calculator
Premium calculators are an essential tool for premium calculation. Some of the benefits associated with it are:
- Reduces the work load of employees as well as agents
- Saves time and gives quick premium estimates
- Comparison among various plans becomes easier
- Comparison among different insurance companies becomes easier
- Online trade of the insurance product becomes easy and less complicated
Q1. What is the minimum age required to buy a term insurance plan?
You need to be of 18 years at least to buy any term insurance plan. This age is set for the proposer.
Q2. Can I claim tax exemption in a term insurance plan?
Yes. Benefits received along with premiums paid towards a term insurance plan are eligible for tax exemption.
Q3. What are the documents required for buying a term life insurance plan?
You will be needed to provide ID proof, PAN Card, age proof, address proof, income proof along with your photographs.