Becoming financially secure with the help of life insurance is important for everyone. However, if there is one thing that people want to ask before buying a suitable term plan, it is the premium payable for a specific life cover. Although the cost of a term insurance policy is not the only crucial thing to consider, it is an important one that determines whether or not an individual would be able to buy the plan. This is where a term insurance calculator helps in making an informed decision.
Wondering how to benefit from using a term insurance premium calculator, how it works, and more? BimaBandhu has all doubts covered in this guide to using a term plan premium calculator.
What is a Term Insurance Calculator?
As the name suggests, a term plan premium calculator is a freely accessible tool that helps individuals in getting an estimate of the monthly/annual premium payable towards a specific policy. Although it is quite simple to use and is easily available online, it is quite helpful in comparing term insurance plans.
In insurance terms, a term plan calculator gives an approximate idea of the premium payable to buy a term plan with a specific sum assured and for a particular policy period. In most cases, every life insurance company has its own online term insurance calculator available to help prospects get an idea of the policies they offer. It means once you have decided on a specific life insurance company, you can use its free term insurance premium calculator available on the official website.
Why Do You Need a Term Insurance Calculator?
- It helps get an estimate of the premium payable for a term plan.
- It helps compare different term insurance policies easily.
- You can also use a term insurance premium calculator to check how the premium for a plan varies as you change the policy period or sum assured.
- It also allows you to assess your financial condition which matters a lot at the time of selecting an adequate sum assured.
- It also helps you select the right policy period for your term plan as per your current health condition and lifestyle.
- Ultimately, it helps you zero in on the best term insurance plan available for your needs.
How Does a Term Insurance Calculator Work?
Most term insurance calculators available online work on an estimation basis. They only provide an approximate idea of the premium payable while the actual price may slightly vary from the computed value. You need to start using this type of online calculator by entering personal information like your age and annual income. You can continue using it as per the generic steps given below:
Steps to Calculate Term Insurance Premium Online
You can get term insurance premium quotes in just a few minutes by following the steps given below:
- Enter your personal information including date of birth, gender, and annual income as required in the chosen term plan premium calculator.
- Select the sum assured you want and the policy period for which you want to secure your life.
- Select the preferred premium payment mode – monthly, quarterly, half-yearly, or once a year.
- You may also need to specify how you want the policy nominee to get the benefits – as lumpsum or in the form of a monthly income.
- Include term insurance add-ons if needed.
- Wait for the calculator to show you the premium estimate.
You can continue with these steps for different sum assured and policy periods to check how the premium varies. This way, a term insurance calculator can help you select the best plan. Keep in mind that the premium for young policy buyers is lower compared to an aged individual.
Benefits of Using Online Term Insurance Premium Calculator
If you are on the lookout for the best term plan, a term insurance calculator is what you need. Given below are some of its major benefits:
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Saves time
An online term insurance premium calculator helps you save time as you need not save documents to multiple insurance companies to get their respective premium quotes. Once you are comfortable with a specific premium, you can buy the corresponding plan online.
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Easy to compare various plans
A term insurance calculator in India can provide you the option to compare term policies offered by different insurers conveniently.
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Makes Budgeting Easy
With the availability of multiple term plans in the market, it can be challenging to know how much premium you should pay for a suitable plan. You can get a fair assessment of the premium amount as per the policy benefits using a term plan premium calculator. Accordingly, you can make it fit into your financial budget.
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Helps in Financial Planning
Once you get to know the estimate of the premium payable for a term plan, you can select the sum assured for which the corresponding premium is affordable for you. This way, you can avoid missing out on making timely premium payments to your insurer.
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Factors that Determine Term Insurance Policy Premium
You must know about the factors that determine the term plan premium before you use an online term insurance calculator. Some of them are:
- Your specific insurance needs
- Your age
- Medical history
- Lifestyle followed
- Chosen sum assured
- Gender
- Chosen policy period
- Mode of policy purchase – online or offline
- Your occupation
Are Online Term Insurance Calculators Reliable?
The easy availability of term insurance premium calculators has made the process of comparing different plans easier. It provides you with a hassle-free way to calculate premium estimates in just a few minutes. Most of the term insurance calculators available on the official insurer website or their partner websites are reliable. Your discretion is advised when you use them for your needs.
