Term Insurance Calculator

Term Insurance Premium by Age ₹1 Crore Cover

Does Age Impact Your Term Insurance Premiums?

Term insurance premiums remain eligible for tax benefits throughout the policy term, regardless of your age. However, purchasing a term plan at a younger age can help you lock in lower premiums for the entire policy duration. Review the table below to see how premiums typically increase with age and understand why buying term insurance early can be a financially smart decision.

What is the Impact of Smoking on Term Insurance Premium?

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 a term insurance calculator.

For example, Ramesh, a 31 year old healthy male looking to buy a term insurance plan with a ₹1 crore life cover may see an increase in premium if he is a smoker.

Quitting alcohol and smoking might help reduce your premiums, as insurance companies may re-evaluate your risk profile at the time of filling new applications or policy renewals. So, try to follow expert tips to quit alcohol so that it does not impact your premiums.

Read more about tips to quit smoking

Note: Information sources from Policybazaar

How Occupation Impacts Term Insurance Premium Calculation?

Insurers consider your occupation while calculating term insurance premiums, as jobs are classified based on risk levels. High-risk professions such as pilots, miners, military personnel, and construction workers generally attract higher premiums than low-risk professions like teachers, office employees, or accountants. This is because occupations with greater exposure to risk have a higher likelihood of accidental injury or death.

To get an estimated premium based on your profession, you can use an online term insurance calculator. Always provide accurate occupational details to ensure correct premium calculations and hassle-free claim settlement.

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.

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.

How to Use the 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

How to Calculate the Right Term Insurance Cover?

Most people pick a round number ₹50 lakh or ₹1 crore without calculating whether it actually meets their family's needs. Here are two methods to arrive at the right number:

HLV Calculator vs Term Insurance Calculator — Which One to Use?

Let’s understand how to calculate Human Life Value (HLV)

Formula:

HLV = Future Income + Liabilities + Dependent Needs − Existing Life Cover

Dhruv's Example (Age 25, Annual Income ₹10 Lakh)

• Future Income: ₹10 Lakh × 35 years = ₹3.5 Crore

• Outstanding Liabilities: Home Loan (₹40 Lakh) + Personal Loan (₹5 Lakh) = ₹45 Lakh

• Dependent Needs: Spouse, Child's Education & Parents = ₹50 Lakh

• Existing Life Cover: ₹25 Lakh

Calculation:

₹3.5 Crore + ₹45 Lakh + ₹50 Lakh − ₹25 Lakh = ₹4.2 Crore

Recommended Term Insurance Cover: ₹4.2 Crore. This amount can help replace Dhruv's income, clear debts, and support his family's future financial needs.

How to Calculate Your Term Insurance Premium Without Personal Information?

You can easily compute a term insurance premium without entering any personal information. There are 2 ways to do this:

When you know your sum assured?

Simply enter your age, gender, and smoking/tobacco consumption status to get an instant estimate of your term insurance premium.

If You Are Unsure About the Required Coverage

Provide details such as your annual income, age, gender, and smoking/tobacco consumption status. Based on this information, the calculator will suggest a suitable sum assured along with an estimated premium amount.

You can check different coverage options and estimate premiums without sharing any personal contact details, helping you plan your family's financial protection with ease.

Tax Benefits on Term Insurance

Section 80C: Tax Deduction on Premiums Paid

The premiums paid towards a term insurance policy qualify for a tax deduction of up to ₹1.5 lakh per financial year under Section 80C of the Income Tax Act, subject to applicable terms and conditions. This benefit can help reduce your taxable income while securing your family's financial future.

Section 10(10D): Tax-Free Death Benefit

The death benefit received by the nominee under a term insurance policy is generally exempt from tax under Section 10(10D). This ensures that your loved ones receive the full claim amount without any tax liability, providing maximum financial support during difficult times.

Dual Advantage of Protection and Tax Savings

Term insurance offers a combination of life cover and tax efficiency. While you protect your family's financial future with a substantial life cover, you can also enjoy tax benefits on the premiums paid and the policy proceeds received, subject to prevailing tax laws.

Note: Tax benefits are subject to changes in tax laws and individual eligibility. Please consult a tax advisor for personalised guidance.

Term Insurance Calculator vs Whole Life Insurance

While a term insurance calculator helps you estimate the right coverage and premium, it's equally important to understand how term insurance compares with other life insurance options, such as whole life insurance.

What are the Benefits of Using a Term Insurance Calculator?

Here is a list of benefits of using a term insurance calculator:

What Happens When You Do Not Use a Term Insurance Calculator?

A term insurance calculator helps you estimate the right life cover and premium based on your financial needs. Without using one, you may end up choosing a plan that is either too expensive or provides insufficient coverage.

Higher Premium Burden
Without assessing your actual protection requirements, you may select a plan with a premium that exceeds your budget, putting unnecessary strain on your finances.

Inadequate Life Cover
Focusing only on lower premiums can result in choosing a policy with insufficient coverage, leaving your family financially vulnerable in your absence.

Using a term insurance calculator helps strike the right balance between affordability and adequate financial protection.

Quick Guide To Term Insurance Calculator

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

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