Mumbai (Maharashtra) [India], March 26: Term insurance is a type of life insurance that provides financial security to the family members of a policyholder at an affordable premium for a definite time period. In case the insured dies during the policy tenure, the nominee gets the death benefit in exchange for the premium paid. A policyholder can use a Term Plan Premium Calculator to compare the premium amounts offered at the same sum assured for the same insured person.
A Term Plan Premium calculator is used to determine the premium amount, which depends on multiple factors, such as age, policy tenure, health, coverage amount, etc. A policyholder can compare the different plans using a term plan calculator to select a plan that best suits his/ her requirements. It is basically a free online tool that helps calculate the premium amount, saving time and effort. The details required to be provided to calculate the premium amount are:
- Name and contact details
- Gender
- Date of birth
- Educational Qualification
- Optional riders
- Smoking or tobacco consumption habits
- Annual income
- Occupation
- Sum assured
- PIN code
- Policy tenure
- Premium paying tenure
- Policy variant (if available)
- Premium paying frequency
Factors Affecting Term Plan Premium Amount
- Age: The younger the person, the lower the premium as they are less prone to diseases and have longer life expectancies.
- Health Condition: In case of any pre-existing health condition, the premium would be on the higher side. Also, some insurers get medical tests conducted to get the health assessment done before the plan is bought.
- Gender: Normally, women have a higher life expectancy than men, hence, as men are more prone to risks, they are charged higher premiums.
- Smoking Habits: As smoking leads to life-threatening diseases, which makes it difficult for smokers to get insured, further pushing premiums to be higher.
- Occupation: Riskier profession attracts higher premiums than those doing desk jobs.
- Lifestyle Habits: If you have high-risk hobbies such as skydiving, scuba diving, mountaineering, etc., it will lead to high premium costs.
- Sum Assured: In case of high coverage amount, the premium amount also increases, as the financial responsibility of the insurance company also increases.
- Premium Payment Tenure: If you opt for a shorter policy tenure, you will have to pay a high premium. On the contrary, if a longer tenure is chosen, the premium cost will decrease but the total cost might increase.
Benefits of Term Insurance Calculator
- Accuracy: It helps to calculate the accurate coverage amount depending on the financial situation, ensuring you are neither under nor over insured.
- Saving of Time: You will get an instant quotation, which will allowyou to eliminate the requirement of calculating the premium amount and coverage amount manually.
- Cost-Effective: It offers cost-effective term insurance that meets your required budget.
- Comparisons:To choose the most apt term insurance plan, the term plan calculator allows you to compare the different quotes available from different insurance companies.
- Transparency: There is complete transparency in the amount of premium, details of the policy, and sum assured, aiding in making an informed decision.
- Free of Cost: It is totally free of cost, allowing you to make informed financial decisions.
- Convenience: It can be used at your convenience, i.e. at any time and from anywhere, from the comfort of your home or office.
What Happens if a Term Plan Premium Calculator is not Used?
- Overpaying: A calculator helps in getting the exact amount that best suits your budget and requirements, if not used, it may lead to paying more than what is needed.
- Underinsurance: Non-usage of premium calculators might lead to not buying enough coverage that will protect the family members, i.e. it may not fulfill the financial requirements of the family members in the absence of the policyholder.
- Financial Stress: Not knowing the premium amount will increase the stress, affecting the mental peace and financial planning.
Types of Term insurance Calculators
- Term insurance premium calculator: It calculates the premium cost depending on certain factors such as the sum assured, critical riders, policy tenure, features of the plan, etc. Also, it considers age, health conditions, gender, etc.
- Investment premium calculator: Some insurance plans offer dual benefits, i.e., a part of its premium is diverted towards investment and the rest towards insurance. This calculator helps in ascertaining the amount of returns against the amount invested, enabling efficient planning of future obligations.
- Child insurance premium calculator: It helps in accumulating funds to meet the future requirements of your child and protecting them in your absence. This calculator helps calculate the premium amount for the child insurance plans.
- Annuity or pension plan premium calculator: This calculator helps calculate the amount that should be invested to secure the retirement age, i.e. old age.
Steps to Use a Term Plan Premium Calculator
Provided are the steps to use a Term Insurance Premium Calculator:
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- Visit the official website of the insurance provider company. Click the tab “Financial Calculator”.
- Choose the next option, i.e., “Term Insurance Calculator”.
- Fill out some basic details such as name, contact number, age, gender, occupation, address, educational qualification, annual income range, etc.
- Tick mark the tab “I accept the terms and conditions” and click Submit.
- The calculator will now display suitable term plans based on the data entered above.
- Provide the documents as required by the plan.
- Click Next, it will redirect you to a page, where the following details would be required:
- Policy tenure
- Life coverage amount
- Premium payment tenure
- Frequency of premium payment
- Benefit pay out option
- The calculator will now show the premium amount calculated on the basis of data entered.
- Click “next” once the details are finalised.
- Some additional details will also be required, such as:
- Auto mode option
- If the maturity amount is to be received in parts
- In case of an existing customer
- First time buyer
- Premium holiday option
- You will now be redirected towards the payment page.
- Check for the details as displayed on the screen and confirm their correctness.
- Click on the option “Pay Now” through the payment gateways.
- Fill out the “Proposal Form” and submit it along with the relevant documents.
Conclusion
Term Plan Calculator is a tool that assists in calculating the premium amount of a term insurance plan, which can either be purchased online or offline through a registered insurance company or an agent. The more accurate the data is, the more accurate the premium amount would be.
