Buying a suitable term insurance plan for your family is a little challenging if you do not know how much cover you need. A term insurance premium calculator lends a helping hand to assess the cover amount that is needed for the financial protection of your loved ones. A term insurance premium calculator provides an estimate of the premiums that you have to pay. Each insurance policy has a different premium based on the insured's requirements.
What are the Benefits of Using a Term Insurance Premium Calculator?
Getting a term insurance policy is important to help your family cope with the financial distress after your demise. They should have the financial support to help them continue with their lives without much disruption. Hence, the cover amount you choose must be enough to support their needs and expenses.
Listed below are some of the benefits of using a term insurance calculator:
a) It helps you compare the premiums of different term plans in terms of duration and coverage needed by you.
b) It shows how much premium you'll have to pay based on the policy you've chosen.
c) It enables you to plan your finances and prepare a budget for your expenses beforehand.
d) It also defines the future of your investments before landing upon a one-term plan.
e) Moreover, you can choose the right insurance policy and protect your family from financial distress.
There are many term insurance policies to choose from, but you need the one that suits you and your family's needs. A term insurance calculator enables you to compare different insurance policies as per your needs. If you are at the 25 to 40-year mark, your coverage plan would be more, and your premium would be calculated based on the monthly, quarterly, or annual premium plan. A term insurance calculator will assist you in choosing what is best for you.
Five Things to Consider while Using a Term Insurance Premium Calculator
A term insurance plan is a type of life insurance policy under which the insured person is due a certain sum of money in the event of an unfortunate incident, that is, if the insured dies. The person is insured for a specific period, i.e., the 'term'.
If the insured dies before the term's maturity, then the beneficiary of the insured is entitled to the financial coverage paid by the insurer. With a term insurance plan with return of premium, the policyholder will get all the premiums back if they survive the policy term.
1. Duration of the Policy
The duration of the 'term' of the policy depends on the insured person's age and health. If your demise happens before maturity, then the death benefits are provided to the beneficiary of the insured person. Choose the duration considering your family’s financial needs and expenses in mind.
2. Amount of Cover
You should first consider the coverage you need according to your financial needs. If you are young while buying the term plan, then your cover should be at least 15 times more than your annual income, whereas if you are above the mark of 40, then your financial coverage should be 10 times your yearly income.
3. Frequency of Premium Payment
The premium payment term refers to the premium payment frequency - monthly, quarterly, semi-annually, or annually. You can choose the premium payment term keeping in mind your financial capability and existing liabilities. There are a few term insurance plans that offer limited premium pay, where in you can pay the premiums in a single shot too.
4. Annual Income
Before choosing the right term insurance policy, you need to consider your annual income. The term insurance premium calculator helps you estimate the premiums based on your annual income and your financial needs.
5. Goals and Budget
You should review your financial goals such as child’s education, their wedding, your retirement before buying a term insurance plan. Knowing your goals will help you budget for both your long-term and short-term goals.
How to Use an Online Term Insurance Premium Calculator?
Canara HSBC Oriental Bank of Commerce Life Insurance has an online term insurance premium calculator that can help you estimate your premiums in advance. The first step in calculating the premium amount is to enter your details accurately. These include:
a) Your full name
b) Your gender
c) Your date of birth
d) The state where you are currently residing
Enter your additional details. The next step is to feed in the insured's additional details, keeping in mind the type of policy chosen. These include:
a) The payment frequency according to the product selected
b) Life coverage of the investment plan
c) Plan option
d) Queries regarding lifestyle
How to Choose the Right Cover Amount for your Term Insurance Plan?
The estimated premium of the term plan depends on the information provided by you. The accuracy of it varies according as per the details you choose to share while using the term insurance premium calculator. Therefore, the minimum amount assured is provided to you based on your financial needs.
a) First, calculate the current cost of your future goals. Future goals vary from person to person. Your future goals may include renovating the house, planning for your children's marriages or plans for higher education, retirement plans, and so on.
b) Second, consider your current or future liabilities, such as car loans, home loans, business liabilities, and add them to the financial goal cost.
c) Finally, subtract your liquid investments, such as FDs, PPF, pension funds, and more, from the balance.
The sum calculated at the end is the actual sum assured to you by the insurer based on the term plan you choose.
A term insurance policy is the simplest type of life insurance plan. It provides financial protection for your family in case the unthinkable occurs. Your savings and investment plans are what will help your family get through the inevitable tragedy. In the time of emotional distress, they should have financial support to safeguard their future in your absence.