Term vs Whole Life Insurance Calculator

Nowadays, having insurance is a necessity because it is a foundation of good financial planning at the right age. With the growing life insurance market, there are several plans available ranging from basic protection and savings to investment plans. Amongst all these plans, term insurance and whole life insurance plans provide comprehensive and the most basic life coverage that caters to different requirements of their buyers. Term and Whole life insurance calculators are designed to calculate the actual premium you are required to pay. The plans will be chosen based on your financial needs and future objectives.

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Term Insurance 

A basic type of life insurance is term insurance. It is a basic protection plan that offers life coverage for a limited period. Term Insurance plans provide financial protection and security (in a form of a lump-sum amount payable as a death benefit) to the nominee/beneficiary in case of any unforeseen situation with the policyholder throughout the policy tenure. These policies provide high coverage at minimal premium prices. The premium prices are fixed which are required to be paid at one time or a regular period for the complete policy tenure or for a specific time. The amount of premium varies based on the premium payment mode chosen by the customer at the time of buying the policy. 

The major benefits of term insurance are: 

  • Lower premium rates and high sum assured - Term insurance is available at lower premium rates that one can easily buy and enjoy the benefits for the rest of their life. And, the other important advantage of a term insurance plan is the ‘earlier you buy a term insurance plan, the lower the premium price you have to pay.
  • Easy buying process - Once you start paying the regular premiums, then the insurer provides you the coverage for a fixed period, thus offers the term insurance benefits.
  • Critical Illness Cover – Critical illnesses such as brain surgery, cancer, stroke is also covered by the term insurance plan. 
  • Death Benefit - This benefit increases the sum assured that is required to be paid to your family members in case of an unfortunate event such as accidental death.
  • Additional Riders – These plans come out with different riders as per your choice to strengthen and enhance the benefits of the plan.
  • Tax Benefit - Term Insurance Plan offers the Tax Benefits on premium paid and receiving benefits are also eligible for income tax under section 80(C) and 10(10D) of Income Tax Act, 1961.

Whole Life Insurance /Permanent Life Insurance? 

Whole Life Insurance is a term insurance plan that provides you coverage till the age of 99 years. The policy offers guaranteed death benefits to the nominee/beneficiary of the plan in case of an unfortunate demise of the policyholder. The sum assured will be decided by the policyholder at the time of buying the policy. They can also avail tax benefits u/s 80C on the premiums paid for the policy and the claims for maturity are exempted from tax u/s 10(10D) of Income Tax Act 1961. 

Term Insurance and Whole Life Insurance Calculator 

Term and Whole Life Insurance Calculator is a tool that is used to determine the actual amount of premium, a policyholder is required to pay to the insurance company. With the availability of several insurance companies offering plans, an insurance calculator helps in the easy comparison of several plans, thus you can select your insurance company as per your requirements. It is a hassle-free and quick process of comparison and it can also be customized as the needs. 

Benefits of Premium Calculator 

  • It saves a lot of time 
  • You can easily compare different plans 
  • Cost-effectiveness 
  • Gives an idea of the premium amount one would require to pay 

Besides all this, while calculating premiums using a calculator the life assured is required to provide some information such as the age of the applicant, name of the plan, sum assured gender, policy term, date of birth, rider, and the name of the proposer. 

Term Insurance vs Whole Life Insurance

Term Insurance 

Whole Life Insurance 

A term insurance plan is good for you if there are financial dependants in your family who would stay dependent for a specific time such as kids who ultimately grow and become independent financially. 

If you have financial dependents who will remain dependant on you only for a comparatively longer period such as children with special requirements. 

It lasts till the policy is active 

It lasts only for a limited or a specific period 

It has cash-value 

No cash-value

Premiums are comparatively higher 

Low premium prices 

Ideal for an individual looking out for long term assurance i.e., investment + insurance 

Ideal for someone looking out for short term assurance along with better coverages 

Initially, the premium prices are high but remain constant with time 

Premiums increases at each point of renewal

Which is better term or whole life insurance? 

A term plan is the right plan for you if you are at the age of 20 or 30 years. These plans provide you financial protection along with a pocket-friendly premium payment option. Moreover, term plans also offer large benefits in the short policy tenure. 

A combination of term and whole life insurance is an ideal option for a married person having 2 kids. The whole life insurance policy provides you the cash value used at different stages of life, whereas the rider in term insurance will enhance the coverage, provides security to the dependants along with high financial benefits. For an individual of 40 years, whole life insurance is the best consideration. The plan provides cover during your life and it is quite economical than the term insurance plans. Apart from all this, the selection of plans depends on the buyer’s requirements and his/her future goals. 

Best term Insurance Plans in India Best term Insurance Plans in India

Wrapping It Up! 

Term and Whole life insurance calculators are used to estimate the premium amount required to pay at different points in time. Both plans are ideal but their selection depends entirely on the requirements of the life assured. One should always be aware of the features and benefits of the policy he/she is going to buy. Choose your plans carefully.

Written By: PolicyBazaar

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