Amidst the uncertain times we all are facing these days, it has become crucial to build a financial safety net for our families. This can be done by buying a suitable life insurance policy in India after careful analysis of our needs. While you can easily find a wide variety of life insurance plans both online and offline, selecting the right one often becomes challenging, particularly when our finances do not allow us to accommodate any other expense. This is where a life insurance premium calculator can help you make the right decision.
In this blog post, we will cover various sides of a life insurance premium calculator to let you know how to use it right.
What is a Life Insurance Premium Calculator?
A life insurance calculator is a simple tool that can provide you with an estimate of the premium payable to buy a specific life insurance plan. It takes into account the age of the policy buyer, chosen sum assured, premium payment frequency, and several other factors to calculate the approximate premium amount.
Most of the life insurance providers in India have a premium calculator available on their official websites. It means you can use the calculator on the website of your preferred insurer to get a better idea of the premium.
How Does a Life Insurance Calculator Work?
Irrespective of the life insurance calculator you select to get an estimate, you need to enter the following details while getting the premium estimate:
- Name of the selected policy
- Your age
- Sum assured you want to choose
- Frequency of premium payments – which can be monthly, quarterly, half-yearly, or annually
- Policy period
- Additional riders if any
3-Step Process to Use a Life Insurance Premium Calculator
To know how to calculate life insurance premium, follow this three-step process:
- Enter the personal details like your name, age, gender, annual income, and marital status in the respective fields of a life insurance calculator.
- Enter your expectations from the policy by adding specific values for sum assured, policy tenure, policy type, and life insurance riders.
- Submit all the details in the life insurance premium calculator to obtain an estimated premium figure in a few minutes.
If you are satisfied with the premium shown as per your selection of different parameters, you can also proceed to buy the plan online at the same time.
Benefits of Using a Life Insurance Calculator
- It helps you calculate the premium estimate for a life insurance plan without the hassles of calculating the same manually.
- The premium estimate obtained using the calculator will also help you analyze your finances and plan for buying a suitable policy.
- The premium calculation under a life insurance calculator is completely automated and error-free.
- By comparing the premiums and benefits of different plans, you can better understand which policy is meant for you.
- You will also get to know the tax benefits you can avail of under Section 80C of the Income Tax Act.
Also Read: Why Buy Life Insurance?
More About Life Insurance Premium
A life insurance premium is a recurring or one-time payment that you, as a life insurance policy holder, need to make towards your policy. The validity of any such policy is based on the insurer’s guidelines and timely payment of premium. Since most life insurance providers give the option to select the premium payment frequency, you can choose the one that is suitable as per your income and other financial needs.
You should also know that the life insurance premium varies as per the plan you select and your overall profile. For example, if you, being a young and healthy individual, want to buy a term plan, you can get it at a lower premium than those who are comparatively older and unhealthy. Besides this, you should know about several variables to learn how to use a term life insurance premium calculator.
Factors that Affect Life Insurance Premium
- Policyholder’s age
- Life coverage selected – with or without add-ons/riders
- Current health condition
- Lifestyle habits
How to calculate the life insurance coverage you need?
You can calculate the life insurance cover you need by considering your monthly expenses, existing liabilities, total income, and human life value. It is advisable to select the sum assured at least ten times your annual income.
What is the simplest way to calculate life insurance premium?
The easiest way to calculate a premium estimate for a specific life insurance policy is to use the corresponding life insurance premium calculator online.
Why is my life insurance premium so high?
A high premium can be the result of selecting a considerably high sum assured with life insurance riders for a longer policy period. If you are still searching for a policy, you can adjust the sum assured and various other elements to select the plan that is suitable for you.