Here’s Why and How to Calculate Premium Using Term Plan Premium Calculator

  • Facebook
  • Twitter
  • Reddit
  • Flipboard
  • Email
  • WhatsApp
Term Insurance Premium Calculator
Term Insurance Premium Calculator

New Delhi : Term insurance comes to great help when you are at the most vulnerable times – upon the death of the policyholder, where you will be paid a specific sum of money to the beneficiary. Unlike conventional insurance plans, term insurance comes in affordable plans, making it financially viable for the policyholder. Thus, on the sudden demise of the policyholder, the family is financially secured and covered for the sum assured.

How Does Term Insurance Work?

When you buy a term insurance plan, you pay a premium for a specific period of usually 4-30 years of the policy tenure. If you die during this time, a death benefit is paid to your family or the nominee who is entitled to receive the benefit, which is generally tax-free. 

In addition, you can easily calculate the term insurance premium using a term plan premium calculator online, which also allow you to explore different add-on riders, and shows you the estimated premium you need to pay. 

Term Plan Premium Calculator & Factors For The Calculation Of Term Insurance Premium

A term plan premium calculator is an effective tool that can be used to calculate the premium payable for a term insurance policy. The premium to be paid depends on several factors based on which you get an exact amount of premium estimate. Let’s have a look into these factors that affect the premium calculation:

1. Age

The base factor that determines the calculation of premium is an individual’s age. Therefore, if you are looking to buy a term plan, it is good to buy at a young age, preferably during your working age. Why, you may ask? This is because, at a younger age, the risk factor is comparatively less, than buying a policy at a late age.

2. Gender

Women generally are offered with low premium than men in the same age group.

3. Occupation

Your source of income plays a crucial role in determining the premium of term insurance. If your income is higher, you get chances of having a low premium.

4. Tenure of term plan

The term period for the policy selected affects the premium amount payable. 

5. Premium payment frequency

You can pay the premium either monthly, quarterly, half-yearly, or annually. Paying monthly derives the benefits of getting a lower premium.

6. Lifestyle habits

Whether you smoke cigarettes or drink alcohol regularly needs to be entered while calculating the term insurance premium, as any of these can result in higher premiums.

7. Medical history 

People who are already having an existing medical condition will have lesser chances of getting a low premium, as they are prone to more illnesses. Also, while buying a policy, the insured is required to disclose all his medical history without failure to avoid any further claims.

There are several other factors as well, but these are the crucial factors that will be considered for calculating the premium. Based on the input entered for these factors mentioned above, you will get the premium payable amount, which gives you an understanding of the coverage amount.

Benefits Of Term Insurance

Higher Sum Assured At Affordable Premiums

The term insurance policy offers an affordable premium with maximum coverage and high assured, unlike other insurance policies.

Critical Illness Coverage 

You can opt for a critical illness rider that provides coverage for the expense incurred for diagnosing a critical illness.

Multiple Death Benefit Payout Options

With a term insurance plan, your dependents may get a lump sum amount on your sudden absence to manage your existing financial liabilities like EMI payments and loan repayments, etc.

Easy To Understand

Unlike other standard life insurance, a term plan covers your life for a fixed time to offer coverage and tax benefits.

Income Tax Benefits (Under Section 80D And Section 10(10D) 

You get a maximum tax deduction of Rs. 25000 per year under Section 80D. While the maturity benefits are completely tax-free under Section 10 (10D).

Customization Options Available For The Policyholder 

Whether you want to add new riders, renew the policy or add some new features, you can customize the plan accordingly.

Return Of Premium Option 

Under a term insurance plan, if the policyholder survives the policy tenure, he/she will get back the premium amount paid towards the policy

Today, being in this digital world, it is easy to have a term insurance comparison done online so that you can choose the best plan that fits your financial requirements and needs. In addition, reputable insurance providers such as Max Life Insurance have online term plan premium calculators that can help you compare different plans and their premiums easily. So, go ahead, use the calculator and find the best term plan for yourself!