Life Insurance Premium Calculator

What Is a Life Insurance Premium Calculator?

A Life Insurance 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 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: Select the required life cover and cover till age.

Step 3: The lowest premium applicable for your profile will be mentioned on the screen.

*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?

Below are the different types of life insurance calculators available in India:

How Does a Life Insurance Premium Calculator Work?

A Life Insurance Premium Calculator is a simple online tool that helps you estimate the premium you need to pay for your chosen life insurance coverage. It considers your age, income, policy term, coverage amount, and lifestyle habits to give you an instant premium quote. This helps you plan your finances and choose a policy that matches your protection needs and budget.
The calculator then instantly generates the estimated premium. Experts recommend that your life insurance coverage be at least 10 to 15 times your annual income to ensure sufficient financial protection. Additionally, you can use the Human Life Value (HLV) Calculator to determine the ideal coverage amount based on your income, expenses, financial obligations, and remaining working years. This helps you understand your economic value and select a plan that aligns with your financial goals.
Let’s understand how a life insurance premium calculator works with Anita's example:
Anita, a 30-year-old woman earning ₹12 lakhs per year, wants to secure her family’s future with a ₹1 crore life cover for the next 30 years.
Anita wishes to buy a suitable life insurance plan within her budget, but isn't sure how much premium she would need to pay.
She uses the Life Insurance Premium Calculator, entering her age, policy term, desired coverage amount, gender, and tobacco usage, then clicks on ‘Check Your Premium'. Within a few seconds, Anita receives an estimate of her premium amount from the calculator, enabling her to make an informed decision and choose the best plan for her family's financial security.

Why Should You Use a Life Insurance Premium Calculator? 

Instant Premium Estimates: You receive an immediate quote, eliminating the wait time associated with traditional agent consultations.

Budgeting and Financial Planning: By instantly knowing the cost, you can accurately integrate the insurance premium into your monthly or annual budget plan. This is a core money management tip for adults.

Comparative Analysis: You can easily compare the premium rates offered by different insurance companies for the same Sum Assured, ensuring you find the best value for your money.

Customization: The calculator allows you to quickly adjust the policy term, premium payment frequency, and add riders to see how these changes affect the final cost of term insurance.

Determining the Right Cover: By checking the cost of higher coverage such ₹1 Crore term insurance vs. ₹2 Crore term insurance, you can evaluate what level of life cover is genuinely affordable, helping you settle on an adequate 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 cover you choose. A high sum assured directly results in a higher premium amount.

• Current liabilities: Your existing debts, like home loans, car loans, or personal loans, directly influence your premium because your life cover must be large enough to pay off these liabilities entirely, ensuring your family inherits 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 significantly increases the risk of severe health conditions like heart disease, stroke, and cancer. Because of this heightened risk, insurance companies categorize smokers as high-risk applicants and charge them higher premiums compared to non-smokers for the same life insurance plan. If you smoke regularly or have consumed tobacco within a year before purchasing a life insurance policy, you will be classified as a smoker by insurers. The Life Insurance Premium Calculator allows smokers to estimate their premiums quickly, reflecting this higher risk. Typically, the difference in premiums between smokers and non-smokers can be substantial, emphasizing the financial impact of smoking on life insurance costs.

How Much Life Insurance Cover Do You Need?

Selecting the right life cover is essential to ensure your family's financial security in case of your untimely death. Experts suggest your life insurance coverage should be around 10 to 20 times your annual income. For example, if you earn ₹10 lakhs per year, your ideal life cover would be approximately ₹2 to ₹2.5 crores. This ensures your family can manage everyday expenses, pay off outstanding loans, and tackle inflation in your absence. To find the most suitable coverage amount, you can use a Human Life Value (HLV) Calculator, which considers your income, expenses, debts, and financial goals to recommend the optimal life cover for your family's future.

Why is it important to calculate your life cover carefully?
Choosing the right coverage ensures your family doesn't struggle financially after your death. It helps maintain their standard of living and meet long-term goals, such as education, marriage, and retirement.

What happens if your life cover is too low?
If your coverage is inadequate, your family might face financial stress managing daily expenses, EMIs, and future needs, especially in your absence.

Can you increase your life insurance cover later?
Yes, many insurers allow you to enhance your life cover at key life stages—such as marriage, childbirth, or buying a home through top-ups or additional policies.

How does the Human Life Value (HLV) Calculator help?
The HLV Calculator estimates the ideal coverage by evaluating your income, current expenses, liabilities, and future goals, ensuring you choose a sum assured that matches your family’s financial requirements.

Does inflation affect your life insurance needs?
Yes, inflation reduces the real value of money over time. Hence, your life cover should be high enough to offset future price rises and maintain your family’s purchasing power.

FAQs