A term insurance premium calculator is an insurance tool, which helps the insurance buyer calculate the sum assured he/she will need to cover his/her family’s financial liabilities in case of unfortunate demise of the insured. It is simple to use and it proved to be extremely handy if one is planning to buy a term plan.
Term Insurance Premium Calculator
The online term insurance premium calculator allows the insured to calculate the E-premium amount in order to buy a term plan. The policyholder can also customize the calculator suiting his/her preferences.
There are a number of insurance companies offering different insurance products. The policyholder or insurance buyer can use the term insurance plan calculator to choose the best policy by comparing several plans and providers.
How to Use Term Insurance Calculator?
The process to use the online term plan calculator is pretty simple and straightforward. The buyer simply needs to fill in the required information and will get the premium quotes. The whole process is not going to take more than 10-15 minutes.
Below enlisted are the steps to use the term insurance calculator:
- Enter personal information such as date of birth, marital status, gender, number of dependents (children), annual income, etc. The insured may also need to mention smoking habits (if he/she has one).
- After this, the insured will need to mention how much sum assured he/she is looking for and for how many years. He/she also need to mention how he/she wants his/her family to receive the sum assured – as a lump sum or on monthly basis. Enter this set of information and wait for the results.
- The online calculator will recommend some good insurance policies based on the entries made by the insured. Compare the features and choose the term insurance plan that suits all the requirements and then proceed to buy.
- Finally, purchase the plan that his/her family is going to need in the future.
Using the online term plan calculator will help the buyer to compare easily and avoid any ambiguities later on. Use the calculator to compare easily by using our term plan calculator.
Benefits of Term Plan Calculator
Here’ a look into few of the benefits offered by online term insurance calculator:
The online calculator helps the insured save his/her valuable time. It would hardly take 10 minutes to get through the whole process and he/she will be able to find the best suitable term plan he/she was looking for. Once he/she has zeroed in on a plan, he/she can go ahead to buy it online without any intervention of agents.
- Comparison Factor:
This is one of the most unique features of a term plan calculator. It is most probably one and only tool to compare different term plans offered by different insurance providers.
- Cost Effective:
As there is no agent involved in the online purchasing and selling of term plans, it’s a win-win situation for both the companies and the customers. Besides this, the insured also gets to save money on various offers and discounts offered by the insurance providers.
Hence, make the maximum use of term plan online calculators online. Also, the policyholder doesn’t have to waste his/her time in making wild guesses about the sum assured needed and calculate premium amount separately if he/she takes help of this useful tool. Thus, not only it’s an efficient and easy tool to use but it also gives more accurate results as compared to his/her manual calculations.
6 Factors That Affect Your Premium for Term Insurance
Premium rates for a term insurance plan are affected by a number of factors. Different individuals may be assigned different premium rates. People usually get confused about why their premium rates are different from another person and why they are paying a higher or lower rate when compared to other policyholders.
Insurance companies consider different factors while pricing their policies. These factors may or may not be under an individual’s control. However, one’s life choices can certainly lead to these factors that can affect their term insurance premium.
Few of the factors that affect a term insurance premium are:
The age of an applicant is the most obvious factor affecting the term insurance premium. If the applicant is young and fit, her/his premium rates will be much lower as compared to someone who is older in age and is not in a healthy condition.
Insurance companies believe in the fact that the chances of a young individual contracting a life threatening disease or to pass away in her/his youth are very unlikely. Hence, a young individual will make many premium payments for the company before the insurer would have to write a cheque for her/his family.
Even though insurance companies don’t have anything against gender equality, they follow the research and statistical findings that states that women have a 5 years longer life expectancy as compared to men. As women candidates would be paying premiums for a larger time period; hence a lower premium rate for women.
One cannot do much about her/his gene pool. If a policyholder has a family or medical history of serious illnesses like heart diseases, cancer, etc., it makes them susceptible to contract these diseases from a hereditary perspective, which eventually increases the premium rate the particular policyholder has to pay.
It doesn’t need to be mentioned twice that smoking is hazardous and puts the individuals at higher risk of all types of lifestyle diseases. So, if a policyholder is a smoker, her/his habit is considered as a bright red flag among the insurers. This is the reason that the policyholders who smoke get premiums twice as compared to non – smokers.
One’s job profile also plays an important role in the premium rate decided for her/him by the insurance company. Policyholders working in industries like fisheries, mining, oil and gas, etc. have to pay higher premiums as compared to the people who are working in considerably safer jobs.
The premium rates are also dependent on one’s choice of policy. The longer the tenure of the policy, the more the premium one ends up paying and hence lesser is the amount of premium determined by the company. This is the reason that makes short term policies comparatively more expensive than the long term policies.
How these factors affect the premium rates is basically dependent on the insurance companies and how much they value these factors.
For instance the combination of a family history of cancer plus smoking habits can have a significant effect on one’s premium amount in more than one way. Similarly, being obese and a family history of heart disease also affect one’s premium amount.
Every insurance policy and its related premium rates are based on and determined by the insurance provider’s rules of rating.
6 Tips to Keep in Mind While Buying a Term Insurance Plan:
Experts recommend choosing a term plan that is in sync with the changing financial situations in your life. However, it’s important to realize that cost shouldn’t be the only criteria while selecting a term plan.
As per experts, below enlisted are few tips to keep in mind while selecting a term insurance plan:
1. Premium Amount:
Undoubtedly, premium amount is one of the most important factors which influence one’s decision to purchase a term plan. Many times, individuals find their premium rates to be different from another individual. Here, it’s noteworthy to mention that the cost of a term plan does not necessarily define its efficiency or the insurer’s reliability. It also doesn’t mean that a tem plan with higher premium will offer the best benefits or vice versa.
Hence, it becomes crucial to do a thorough research before finalizing on a term plan. One can also use online term insurance calculators to get a clearer picture of how much premium they would be charged for the term plan they have chosen. In addition to, going for online plans can also help you get a term plan on comparatively lower premiums as they are normally cheaper than their offline counterparts.
2. Available Riders/Add-on:
Besides death of the insured, there are several other risk factors that can threaten the financial security of one’s family, like accidental disability, critical illnesses, accidents, etc.
A rider or an add-on is an additional benefit which will protect you against such risks as they can be easily added-on to the base policy by paying a nominal amount as additional premium.
While looking for a term insurance plan, consider one which has multiple rider options. Some of the common riders available with term plans are Premium Waiver Rider, Accidental death rider, Accidental disability rider, Critical Illness Rider, Accelerated sum assured rider and Hospitalization benefit rider.
3. Insurer’s Claim Settlement Ratio:
Claim settlement ratio (CSR) of a particular insurance provider is one of the other crucial factors that should be kept in mind while buying a term plan. Before you shortlist a term plan from a particular insurer, make sure that you check their claim settlement ratio.
CSR may be defined as the total number of claims registered against an insurance provider versus the number of claims settled by it. For instance, if an insurance provider has received a total of 100 claims in a year and it honours 90 of those claims, the company’s claim settlement ratio would come at 90%. Hence, it is an important parameter to decide the company’s track record.
4. Solvency Ratio:
Solvency ratio is one important parameter to determine an insurance company’s reliability. As per regulations, an insurance company should always have a higher value of assets than liabilities. This ensures the company’s capability to have sufficient funds to honour claims during emergencies. Therefore, a higher solvency ratio is a preferable quality to look for in an insurance company.
5. Insurance Company’s Reputation:
Besides the CSR and solvency ratio, there are some other important parameters that can help you assess an insurance provider’s reputation. These include the company’s Assets Under Management (AUM), corporate governance record, etc. It also includes the number of times an insurance provider has violated IRDAI rules.
6. Customer Service:
Last but not the least; it’s equally important to make sure that one also does proper research on the insurance company’s customer service team while purchasing a term plan. After all, once you have bought the policy and face an issue, only the efficiency of the customer care will decide how quicker your issue will be resolved.