Term Insurance Calculator

How Does Term Insurance Premium Calculator Work?

A Term Insurance Calculator is a digital tool that estimates the ideal life cover (sum assured) based on your financial and personal needs. It provides the approximate sum assured of your term insurance and ensures that it is aligned with an individual's income potential, liabilities, and dependent responsibilities.

The main purpose of a term insurance calculator is to determine the ideal coverage amount that would:

• Replace the policyholder’s income over a specified period

• Cover outstanding loans and liabilities

• Fulfil major financial goals

• Protect dependents from financial distress in case of the policyholder's untimely death

Let’s understand how term insurance calculator works with Dhruv’s example:

• Dhruv, a 25 year-old man, earning 10 Lakhs per annum, wishes to secure his family’s future with Term Insurance till he turns 60 years of age.

• Dhruv wants to buy term plan of 1 Crore life cover, within a specified budget. But he is confused about how much term insurance cover he should opt for.

• He uses the Term Insurance Calculator and enters his date of birth, cover till age, and annual income and clicks on ‘Calculate my coverage’

• Dhruv got an estimate of the right cover for him in a few seconds from term insurance calculator, which helped him make an informed decision

What are the Benefits of Using a Term Insurance Calculator?

A Term Insurance Calculator helps individuals make informed decisions about the suitable life cover. Instead of guessing how much term insurance do I need or manually calculating, this term plan calculator uses your financial details to give a personalised estimate of the right sum assured and expected premium. Here’s how it can help you:

Quick Guide To Term Insurance Calculator

How Much Term Insurance Cover Do I Need?

Choosing the right life cover is important as it is the amount your family will receive in the event of your unfortunate demise. Thus, the sum assured amount should be enough to cover your family’s financial needs in your absence. You can use the Human Life Value Calculator to estimate the appropriate life cover for your family. By a general thumb rule, you should buy term plan with a sum assured at least 10 to 20 times your current annual income. For eg: Suppose you are a 30-year-old with an annual income of 10 LPA, then your ideal life cover would be 2.5 Crores. This amount can help your family pay off any outstanding loans and beat inflation in the long run.

What are the Steps to Use the Term Insurance Calculator?

Here is how you can calculate the ideal cover and premiums using a term insurance calculator in 5 simple steps:

Step 1: Visit Policybazaar’s term insurance calculator page

Step 2: Enter Basic Details like Date of Birth, Cover till Age, and Annual Income.

Step 3: Click on ‘Calculate my Coverage’ to get the suggested cover amount

Step 4: Your estimated premium for the suggested life cover will be displayed

Step 5: Click on ‘View Plans’ to check and compare the best term insurance plans for your profile

Why is Choosing the Right Sum Assured Important for Buying a Term Insurance Plan?

The main objective of a life insurance plan is to secure the financial security of your family in the event of your unfortunate demise. Therefore, choosing the right sum assured is essential to ensure that the death benefit will be enough to cover your dependents’ financial needs in your absence.

The term insurance plan death benefit not only provides financial aid for your dependents to maintain their lifestyle in your absence but also take care of any outstanding loans such as personal, car loan are paid even if you will not earn in future.

What is a Term Insurance Plan?

We all want to secure our families' future, even in our absence. A term insurance plan offers affordable protection, providing a large life cover at low premiums. In the event of the policyholder's death, the beneficiary receives a payout.

Term insurance ensures your family's financial needs are met and can help cover liabilities like home or education loans. Some plans also include coverage for critical illnesses.

Who can Buy a Term Insurance Plan?

A Term insurance plan is a necessity for any person who is looking to secure their loved ones/dependents, such as their child, parents, spouse. Everyone should buy term plan to offer financial security to their family members in case of any crisis. The following individuals should consider buying a term insurance plan:

• Young and working professionals 

• Newly married couples 

• Individuals having dependents such as children, parents 

• Individuals with outstanding liabilities such as car loan, home loan, personal loan 

• Senior citizens looking to create a tax-free legacy for their children

Apart from these, term life insurance plan can also be bought by housewives, self-employed individuals, NRIs.

How to Buy Term Insurance Plan From Policybazaar?

Here are 5 simple steps to buy term insurance from Policybazaar: 

Step 1: Visit Policybazaar and go to Term insurance page

Step 2: Fill out the application form by entering your name, gender, and contact details

Step 3: Select a suitable plan for your and complete the payment process by submitting the required documents

Step 4: Complete your medical check-up

Step 5: The Term insurance policy will be issued

Impact of Term Insurance Premium Calculation on Smokers

Smoking increases the risk of developing life-threatening health diseases, such as heart disease and cancer. Insurers have categorised smokers as high-risk and have to pay higher premiums. If you are smoking on a regular basis or have been consuming tobacco for 1 year before buying a term plan, you will be a high-risk individual by the insurer and have to pay a higher premium as compared to non-smokers for the same term life insurance plan. The premiums for these term insurance plans for smokers can be calculated using term insurance calculator.

How Occupation Impacts Term Insurance Premium Calculation?

Certain occupations involve higher risks, such as firefighters, construction workers, or pilots. Insurance companies may charge higher premiums for individuals in high-risk professions due to the increased likelihood of workplace accidents or health hazards. Not only that, but the type of occupation you work in also impacts your premium calculation. The term policy calculator may show higher premiums for term insurance for self-employed individuals than for salaried individuals, because of their unsteady source of income.

In both cases, insurers assess these factors to determine the level of risk associated with the applicant and adjust premiums accordingly. Smokers and those in high-risk occupations can expect to pay more for their insurance coverage.

Can Term Insurance Premium Calculator be Used without Personal Information?

The main benefit of using the term insurance premium calculator without personal information is that it does not require you to fill in your personal information like your name, contact details, and more just to give the approximate premiums for your desired term plan. It computes the required data and provides it in just a few simple steps.

Information Required to Use the Term Insurance Premium Calculator Without Personal Information

The basic information required to use the term insurance premium calculator without personal information are as follows:

• Age

• Gender

• Tobacco Consumption

• Cover Till Age

• Cover Amount

What are the Factors that Affect Term Life Insurance Premium Rates?

Here is a list of factors that affect your term life insurance rates: