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Empower Your Decision-Making with Life Insurance Calculators

  1/18/24 9:32 AM

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Calculating your life insurance expenses can be a hectic process… Or at least it used to be before life insurance calculators came into the picture! Life insurance calculators are online calculators that help you determine your approximate premium based on parameters entered by you. Most insurance providers in India provide a calculator for each of their product. This allows you to quickly find out what your premiums or returns will be for a given life insurance plan. Let’s take a look at some of the main features of life insurance calculators and why they’re so helpful.

Quickly Calculate Your Premium

Most people buy life insurance to financially secure their loved ones in case of their absence. This is why term insurance plans continue to be one of the most sought-after life insurance products in India. Term plans provide a high sum assured for a relatively affordable premium. However, there are multiple factors such as age, gender, lifestyle habits etc. that play a role in determining your premium rate. This means that a layman has no way of figuring out their premium by themselves. 

A term insurance calculator or premium calculator in an indispensable tool for those who want to buy life insurance. With this online tool, you will not have to depend on anyone to figure out your approximate premium. 

Using a term insurance calculator is pretty simple. Just enter your:

  • Age
  • Gender
  • Yearly Income
  • Premium Paying Frequency (monthly, yearly etc.)
  • The Sum Assured (Life Cover) You Need for Your Family 
  • Select Whether You Are a Smoker or Non-Smoker 

Based on these parameters, the term insurance calculator will instantly showcase the approximate premium you need to pay for your term insurance plan. Some term insurance calculators even factor in other aspects, such as whether you are married, whether you have kids, and if you have any health problems or not. 

Are Term Insurance Calculators Accurate?

While term insurance calculators are quite accurate in determining your premium rate, you need to keep in mind that the value can changed based on parameters not included in the calculation. For example, a calculator may not ask you to disclose your health problems, but an insurance underwriter will take these aspects into consideration when you decide to purchase a policy. Remember that the value provided by the premium calculator is a close approximation.

Compound Interest Calculators

Nowadays, insurance policies are not just a means of financial security, they are also an avenue for investment. Guaranteed income plans and Unit Linked Insurance Plans (ULIPs) are types of life insurance that also offer returns. These returns can help you grow your wealth and hit your financial goals. A compound interest calculator is the perfect tool to determine how much money you will get back for the premiums you have invested. 

The best example of this can be seen in a guaranteed returns plan. Guaranteed plans disclose their rate of returns (the rate at which your money will grow) right from the get-go. Let’s assume that you invest ₹5,000 per month for five years at a rate of 7% growth. Using a compound interest calculator, you might determine that you may get back a total of ₹5 lakhs after staying invested for 10 years or more.
Again, keep in mind that your premiums for a guaranteed returns plan are not completely dedicated to investments. A part of your premium will go towards providing you life cover as well. The value provided by the compound interest calculator is just a close approximation of what you will get after your policy term ends. This value can help you determine if a plan is suitable for your financial goals or not. 

Is There a Calculator for ULIPs?

ULIPs are market linked insurance plans, and hence their returns are based on the market performance. This fact makes it quite difficult to accurately determine the returns you will get from a ULIP. Generally, insurance provides consider two possible scenarios for your returns, one where your money grows at 8% and another where the growth rate is at 4%. 

The Main Benefits of Using an Online Life Insurance Calculator

  • Quick & Easy Evaluation: Life insurance calculators save you a lot of time by allowing you to find out your premium and return rates instantly. You will not have to meet an agent just to get a preliminary quote. 
  • Good Way to Compare Plans: The insurance market in India is highly competitive with hundreds of different plans available for purchase. You obliviously want to find a plan that is best suited for your financial and security goals. Life insurance calculators allow you to quickly compare the rates of different plans and select the one that is right for you. 
  • They Are Free: Most life insurance calculators found online are completely free. You just need to enter your expected values to get a quote. No consultation free required. Plus, most life insurance calculators don’t even require you to log-in to the website! 
  • Financial Planning Made Easy: Each person has their own budgetary restrictions based on their life circumstances. Using a life insurance calculator, you can find a reasonably priced plan that perfectly fits into your monthly/yearly budget. 

Use a Life Insurance Calculator to Find Your Ideal Plan!

Now that you understand the types of insurance calculators available online, you can quickly compare plans and find the right one for you. But remember, the premium/returns rate is not the only factor to consider while buying a plan. You should also factor in the insurance provider’s Claim Settlement Ratio, the riders available, and the various other benefits it provides before purchasing a life insurance policy.  


Aastha Mestry - Portfolio Manager 

An Author and a Full-Time Portfolio Manager, Aastha has 6 years of experience working in the Insurance Industry with businesses globally. With a profound interest in traveling, Aastha also loves to blog in her free time.

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