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What is Term Insurance Calculator?
Term insurance calculator is a free online tool that helps you calculate your term insurance premium for the desired life cover and plan benefits. This Policybazaar term insurance plan evaluates important details such as gender, age, cover till age (policy term), life cover (sum assured) amount, and several other factors to help you in choosing a term insurance plan that matches your financial and personal goals. You can use our Policybazaar term insurance calculator to ensure that your family is financially protected in your absence.
How Does Term Insurance Premium Calculator Work?
A Term Insurance Calculator is a digital tool that estimates the premiums for the desired life cover (sum assured) based on your financial and personal needs. It provides the approximate premiums of your term insurance and ensures that it is aligned with an individual's income potential, liabilities, and dependent responsibilities.
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 premium he would need to pay.
He uses the Term Insurance Calculator and enters his age, cover till age, required life cover, gender and clicks on ‘Check your Premium’
Dhruv got an estimate of the premiums for him in a few seconds from term insurance calculator, which helped him make an informed decision
What are the Steps to Use the Term Insurance Calculator?
Here is how you can calculate the ideal premiums using a term insurance calculator in 4 simple steps:
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
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 premium for the right sum assured. Here’s how it can help you:
- Helps Choose the Right Cover Amount
- The term plan calculator allows you to customise the life cover amount and check the premiums applicable for the different life cover options. This ensures your family will be financially protected in your absence, without being underinsured or overinsured.
- Saves Time and Reduces Errors
- Term plan calculator automates complex calculations using standard financial models. You avoid the risk of manual miscalculations and get results within seconds, accurate, fast, and hassle-free.
- Enables Better Financial Planning
- Showing how much cover you need, and the estimated premium, helps you plan your budget. You can see how term insurance fits into your long-term financial strategy, alongside your other financial liabilities.
- Gives Premium Estimates
- The term insurance premium calculator provides a clear idea of how much premium you'll need to pay for your chosen cover and policy term. This helps you choose a plan that fits both your protection needs and your monthly or yearly budget.
- Makes Comparison Easier
- After estimating the required cover, you can click on ‘View Plans’ to compare multiple term insurance plans from various insurers, based on their features, premiums, and benefits side by side.
Note: Know what is term insurance first and then buy a term plan for your loved ones.
Quick Guide To Term Insurance Calculator
- A term insurance calculator is an online tool provided by insurance companies that helps people estimate the ideal cover for you. The term insurance calculator simplifies the process of understanding the right sum assured so that an individual can plan their family’s financial protection accordingly and buy the term plan according to his/her needs and requirements.
- Term insurance premiums are calculated based on factors such as the individual's age, gender, sum assured and policy term. This term insurance premium calculator quickly calculates the term insurance premium and provides an estimate in just a few seconds.
- A Term Insurance Calculator estimates the premium required for a term insurance policy based on inputs like age, annual income, and policy term. An HLV (Human Life Value) Calculator determines the ideal insurance coverage needed based on the policyholder's income, expenses, liabilities, and future financial goals.
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 of 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.
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 Happens When You Don’t Use a Term Insurance Calculator?
A term insurance calculator helps ensure you can afford the premium and get the coverage your family truly needs. Not using it can lead to choices that may weaken the financial security you are trying to build.
Paying a Higher Premium
If you choose a plan without checking your actual financial protection needs, you may end up paying a premium that is too high and doesn’t suit your budget.
Getting Inadequate Life Cover
If you only focus on a low premium while buying term insurance, you might get life cover that is too small to meet your family’s financial needs.
By using a term life insurance calculator, you get an estimate of both the coverage amount and the premium payable, tailored to your age, and financial responsibilities. This ensures that your policy is affordable while still providing the right level of protection for your loved ones.
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, or 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
- Secure their future early at lower premiums and ensure financial protection for dependents in case of unforeseen events.
- Newly married couples
- Provide financial security to their spouse and plan for long-term responsibilities like buying a house or starting a family.
- Individuals with dependents (children, parents)
- Safeguard dependents’ lifestyle and future goals such as children’s education or parents’ medical needs.
- Individuals with outstanding liabilities (car loan, home loan, personal loan)
- Ensure loans are repaid even in their absence, preventing the financial burden from falling on family members.
- Senior citizens
- Create a tax-free financial legacy for their children and provide additional security for their loved ones.
Apart from these, term life insurance plan can also be bought by housewives, self-employed individuals, and 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 the Term insurance page
Step 2: Fill out the application form by entering your name, gender, and contact details
Step 3: Choose the right smoking habit, annual income, occupation type, and educational qualifications
Step 4: Select a suitable plan for you and complete the payment process by submitting the required documents
Step 5: Complete your medical check-up, and 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 considered 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 does Occupation Impact 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. Here’s how you can estimate your term insurance premium without personal information:
In case you already know your required sum assured
If you already know the right sum assured for your needs, you need to simply enter your age, gender, smoking habits, sum assured, and suitable policy term into the term insurance calculator without personal information.
In case you don’t know the right sum assured for yourself
If you are unaware about the right life cover amount for yourself, you can first use the HLV (Human Life Value) calculator tto get an estimate of the right sum assured for your profile, and then fill in the above details in the term insurance premium calculator.
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 is 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:
- Age/Date of Birth
- The younger you are, the lower your premiums will be. The term insurance premium calculator will display a lower premium for individuals in lower age groups.
- Gender
- Women are generally charged up to 20% lower premiums than men. Insurers offer lower premiums for female customers because of their increased life expectancy.
- Life cover/Sum Assured
- The amount of life cover or sum assured you choose directly affects your premium. A higher sum assured provides greater financial protection but also comes with higher premium payments.
- Policy Term
- The duration of your policy, or policy term, also influences the premium. Generally, term insurance plans with longer policy terms come with higher premiums, as the coverage extends over a greater period of time
- Term Insurance Riders
- If you add term insurance riders such as critical illness, accidental death benefit, or waiver of premium to your base plan, it will increase the overall premium but enhance the base coverage.
- Smokers and Tobacco Users
- Lifestyle habits matter significantly. Smokers and tobacco users are charged higher premiums compared to non-smokers, as they are considered higher risk due to health complications linked to tobacco use.
- Occupation
- Your profession also has an impact on premium rates. Individuals working in high-risk jobs, such as those involving hazardous environments or frequent travel, are charged higher premiums compared to those in low-risk occupations.
A term insurance calculator generally uses the above data to get an estimate of the ideal cover and the premium amount you would have to pay. However, the final premium that is to be paid tends to differ case by case.
Note: LIC term insurance calculator also helps calculate the premium of LIC term plans.
Common Customer Queries Answered
- The best term life insurance calculator is one that gives you an accurate estimate of your ideal coverage and premium within minutes. A reliable term plan calculator should take into account factors such as your age, income, lifestyle expenses, liabilities, and existing life cover to suggest the right sum assured. The best term insurance calculator allows you to compare premiums from multiple insurers instantly and choose the plan that best fits your needs.
- You can check your term insurance premium directly through an online term plan premium calculator without having to sign up or share unnecessary details. Simply enter basic information such as your age, gender, smoking habit, policy term, and desired coverage amount to get an instant estimate of premiums. Many online platforms allow you to use their term insurance premium calculator without registration, making the process quick and hassle-free.
- Various term insurance providers offer online term insurance calculators to help them estimate the right premium amount for their profile. With this tool, you can customise the cover term and sum assured to find the one that fits your budget and needs. This makes it easier for customers to evaluate different plans and make an informed decision.
- You can buy term insurance directly online without involving an agent. Policybazaar offers a seamless online process where you can compare multiple plans, calculate premiums using a term insurance calculator, and purchase the policy instantly. This not only saves time but also ensures transparency as you can review all policy details, benefits, and exclusions before making a decision. Additionally, online purchases often come with lower premiums since there are no middlemen involved.
