Life Insurance Calculator

What Is a Life Insurance Calculator?

A Life Insurance Premium Calculator is a free online tool designed to help you calculate the premium amount for your desired insurance coverage and plan benefits. A life insurance premium calculator considers factors like age, marital status, income, medical conditions, debts/loans, and dependents to help you select the life insurance plan that suits your needs.

Most life insurance premium calculator requires you to fill out the following information to use the life insurance calculator:

• Policy Name

• Age of Policyholder

• Sum Assured

• Premium Frequency

• Tenure

• Accidental Benefit Riders, if any

How to Use the Life Insurance Premium Calculator?

Most online life insurance calculators follow the steps below to calculate the premium of an insurance plan:

Step 1: Visit Policybazaar’s term insurance calculator page

Step 2: Enter Basic Details like age, gender, smoking habits, required life cover, and cover till age.

Step 3: Click on ‘Check your Premium’ to get the suggested premium amount

Step 4: Click on ‘View Plans’ to check and compare the best term insurance plans for your profile

*You can easily calculate the LIC premiums using the LIC term plan premium calculator and term insurance calculator.

What are the Various Types of Life Insurance Calculators?

There are three types of life insurance calculators in India, such as:

How Does A Calculator For Life Insurance Premiums Work?

A Life Insurance Calculator is a tool you can use online to figure out how much you need to pay for the life insurance coverage you want. It gives you an instant premium quote based on your age, income, policy term, coverage amount, and way of life. This helps you figure out your finances and pick a policy that fits your needs for protection and your budget.

Let's look at Anita's case to help us figure out how the life insurance premium calculator works.

Anita is 30 years old and earns 12 lakhs a year. She wants to buy a life insurance policy for 30 years that is worth 1 crore to protect her family's future.

Anita wants to buy a life insurance policy that she can afford, but she doesn't know how much the premium will be.

She types in her age, the length of her policy, the amount of coverage she wants, her gender, and whether or not she smokes into the Life Insurance Premium Calculator. Then she clicks "Check Your Premium." In a matter of seconds, 

Anita was able to make an informed choice because the life insurance calculator gave her an estimate of her premiums in just a few seconds.

Why You Should Use a Calculator for Life Insurance Premiums 

• Quick Estimates of Premiums: You get a quote right away, which is better than waiting for a regular agent.

• Quick Premium Estimates: You get a quote right away, so you don't have to wait like you would with a regular agent.

• Planning and budgeting: You can easily include the cost of insurance in your monthly or yearly budget plan because you know the exact amount upfront. This is a simple tip for adults on how to manage their finances.

• Comparative Analysis: It's easy to see how the premium rates for the same Sum Assured differ between different insurance companies. This way, you can be sure to get the best deal for your money.

• Customization: You can easily change the policy term, how often you pay the premium, and add riders to see how these changes affect the final cost of term insurance.

• Finding the Right Cover: You can figure out what level of life insurance is really affordable by comparing the prices of higher coverage, like ₹1 Crore term insurance vs. ₹2 Crore term insurance. This will help you decide on an appropriate sum assured.

What are the Factors that Affect Life Insurance Premium Rates?

The insurance premium rate is the amount one must pay to purchase life cover. Many factors decide the premium of life insurance; these factors are:

• Age: Younger individuals generally receive lower premiums because they are at a lower risk for health issues.

• Annual income: A higher often needs a large life cover to maintain the lifestyle of your family, which can lead to a higher premium rate.

• Health and Lifestyle: Your current health status including any pre-existing medical conditions, and whether you smoke will largely impact the premium.

• Occupation: Some occupations are considered as of high risk and can result in a higher premium amount.

• Sum Assured: This is the amount of life insurance you choose. A higher premium amount is directly caused by a higher sum assured.

• Liabilities: Your current debts, such as home loans, car loans, or personal loans, have a direct effect on your premium because your life insurance must be large enough to pay off these debts in full, making sure that your family gets assets, not debts.

• Future financial goals: These goals, such as children's education, marriage expenses, or retirement planning, dictate a higher premium since your policy needs to provide a large enough Sum Assured to fund these milestones, even if you are no longer there to earn.

• Health Record and Personal Habits: An unhealthy lifestyle, like alcoholism, smoking, etc., results in higher premiums. In other words, those who have unhealthy habits like smoking and alcoholism have to pay more premiums (approximately 30 to 70% more) than those who lead a healthy lifestyle.

Impact of Life Insurance Premium Calculation on Smokers

Smoking makes it much more likely that you will get serious diseases like cancer, heart disease, and stroke. Because of this higher risk, insurance companies put smokers in the "high-risk" group and charge them more for the same life insurance plan than they do for people who don't smoke. If you smoke tobacco often or have smoked it before, Insurance companies will think you smoke if you smoked in the year before you bought life insurance. Smokers can use the Life Insurance Premium Calculator to quickly find out how much their premiums will be. Smokers' premiums are usually higher because they are more likely to die. There is usually a big difference between the premiums for smokers and non-smokers. This shows how smoking changes the price of life insurance.

How Much Life Insurance Cover Do You Need?

Choosing the right life insurance is important to protect your family's money in case you die suddenly. Experts say that your life insurance should be worth 10 to 20 times what you make in a year. This much coverage makes sure that your family can pay their bills and keep living the way they are used to. You can use a Human Life Value (HLV) Calculator to find out how much coverage is best for your family. It looks at your income, expenses, debts, and financial goals to find the best life insurance for your family's future.

Why is it important to calculate your life cover carefully?

Choosing the right life insurance coverage makes sure that your family does not have to face any financial issues after your death and can maintain their standard of living.

What happens if your life cover is too low?

Having low life insurance coverage, you and your family may face financial stress, especially in your absence.

Is it possible to get more life insurance later?

Yes, a lot of life insurance companies let you add more coverage when you get married, have a child, or buy a home.

Does inflation change how much life insurance you need?

Yes, inflation does lower the value of money over time. Because of this, your life insurance should be enough to cover rising costs in the future and keep your family's buying power.

FAQs