Term Insurance Calculator

You can use a term insurance calculator to figure out how much you will have to pay your insurer for your term insurance policy. It can be a tedious process to start investing in a term plan insurance if you are short on essential information. It assists you in knowing the approximate amount you'll need and the amount you have to pay to provide your family with a bright future. You can also compare premiums across different term plans with the use of a term plan calculator.

• A term insurance premium calculator will estimate the premium you will pay for the desired term insurance coverage based on several factors, including your (policyholder’s) age, annual income, type of occupation, lifestyle habits (such as smoking, drinking, or using tobacco products), medical history, years of employment, debts, and the expected increase in income.
• According to industry experts, term insurance coverage should be 15-20 times your annual income. For instance, you should have at least ₹2 crore in term insurance coverage if your yearly income is ₹12 lakh.
• The term insurance premium calculator will determine the premium when you select the desired level of coverage, the duration of the policy, and any additional riders. It will consider information like your age, gender, and sum assured. You will also have to provide information about your lifestyle, including your smoking and drinking habits. The online calculator will provide you with the premium amount you need to pay monthly/ quarterly/ bi-annually or annually. 

The following is a list of some of the main advantages that the term life insurance calculator offers:

Illustration:

Term insurance calculators work on approximations. The common rule of thumb in the insurance industry is: ‘It takes 10 to 15 times the annual take-home income to cover the dependent's expenses.’

• Life Cover: 10-15 times your annual income
• Critical illness cover equal to 5 times your annual income

For example:

Mr Kumar, a 30-year-old, earns Rs. 6 lakhs annually. He wants to opt for a 30 year policy term. He would aim for:

Life cover: Rs. 6 lakhs x 10-15 = Rs. 60-90 lakhs

Critical illness cover: Rs. 6 lakhs x 5 = Rs. 30 lakhs

Policy Term: 30 years

By consistently paying the premiums, Mr Kumar ensures his family receives a lump sum amount if he passes away before the age of 60.

Here are the major factors which affect the premium of your term insurance plan:

 Your Age:

One of the main considerations in determining the life insurance premium is age. Life insurers categorise people into age groups based on comparable death rates. The mortality rate determines the premium amount that applies to your life insurance.

Your term life insurance premium will increase as you age because the mortality rate rises with age. This is the reason it is ultimately more economical to buy term insurance early in life.

Gender:

This regards mortality rate as well since women live longer than males do in most age groups. Therefore, compared to men in the same age range, your term insurance premium is probably going to be lower if you're a woman.

Occupation:

• Category 1: Highly skilled or specialised employment, such as those of drivers, teachers, and doctors.
•  Category 2: Not physically labouring yet semi-skilled. The majority of desk jobs fit within this group.
• Category 3: Physical labour professions requiring little skill, such as mining and heavy manufacturing.

Your occupation defines your living situation and overall health on several levels. Physical stress levels vary amongst professions. Different life expectancies may arise from physically demanding activities that also depend on the age group.

Therefore, according to the risk a given career poses to your life, life insurance firms categorise occupations into three groups:

1. Residential Region: Mortality rates might vary by region as well. The life insurance premium costs in certain locations can be affected if the disparity is significant enough. Thus, the total life cover premium directly reflects regional rates.
   
   Your life insurance premium will probably be greater if your neighbourhood experiences floods or tsunamis, is located in a high seismic zone, or both.
   
   
2. Lifestyle & Health: Lifestyle choices, including drinking alcohol, smoking, and using other tobacco products, also impact life expectancy and, thus, the cost of term insurance. Consequently, leading a healthy lifestyle will make your life happier, and your insurance will cost less.
   
   Your life insurance premium is also influenced by your family's medical history or current health issues. Diabetes is one of the most prevalent medical disorders, and it can eventually cause a wide range of additional problems. Your term insurance premium can be higher if you already have a health issue.
   
   
3. Add-on Benefits & Features: 
   • Accidental Death Benefit
   • Accidental Disability Benefit
   • Cover Against Dire Diseases
   • Term plan with return of premium

You can enhance your term insurance policy with some extra perks.