Term Insurance Plan Calculator Online 2024
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Term Insurance Plan Calculator
Term Insurance Plan Calculator
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How Does a Term Insurance Premium Calculator Work?
Now that we know the importance and benefits of a term insurance calculator, it is also useful to understand how the premium is calculated using a term insurance calculator.
Once you enter personal information such as your name and your date of birth, you get an option to select the frequency of premiums you are comfortable with, i.e., monthly, quarterly, half-yearly, or yearly. This helps in understanding the premium you will be paying for your policy term.
A few other factors that are kept in mind while calculating your premium are your plan type, your gender, sum assured, policy duration, date of birth, any add-ons if selected, and your lifestyle (smoker or non-smoker, any prevailing illness or disease) etc. The younger you are, the lower your premiums will be as compared to an elderly person as the health risks are minimal at a younger age. These factors, when combined, play a major role in deciding your premium rates. You can buy term insurance both online and offline.
What are the Factors Affecting Your Term Insurance Premium?
Here are some of the elements that go into determining a term insurance premium :
Your Age
This is one of the most important factors that is taken into consideration while deciding your premium amount. The younger you are when applying for a term insurance policy, the lower your premiums will be. This is because of the lower risk that you pose to the policy insurer. The older you get, the more likely it is that your health will deteriorate, and an insured event will occur.
Your Gender
According to various recent studies, on average, the life span of women is almost 8% longer than that of men. Hence, different companies have different premiums for men and women. Since it is believed that women live slightly longer than men, insurance companies offer a lower premium to women than to men.
Medical History
If you are someone who has a pre-existing medical condition, you will surely require some extra coverage. Your medical history affects your premium because of the health risk factor involved.
Your Lifestyle
It is known to most of us that people who consume tobacco, alcohol, or smoke live shorter lives than those who don’t. If you have consumed any tobacco products in the last 12 months or if you smoke one cigarette or an entire pack, you will be considered a smoker. These habits cause various health problems and hence, are considered by insurers while charging a higher premium.
Duration of Your Plan
Longer the plan duration, the lower the premium. The longer the plan, the greater the benefit that one's dependents will receive at the time of death, because you have been paying for that time. Always note that a short-term insurance policy is more expensive than a long-term insurance policy.
Selected Sum Assured
In general, the sum assured you select is proportionate to the premium, i.e., the bigger the sum assured, the higher the term plan premium. It is the most obvious aspect that leads to an increase in term insurance premiums based on the policyholder's preferences.
Premium Payment Frequency
With a term insurance plan, you can customize the plan by selecting from various payment options based on your needs. Longer the duration of your premium payment lesser your premiums will be and vice versa.
Riders Included
Riders in insurance are optional advantages that you can add to your existing life insurance policy for a low cost. However, adding these riders comes with a cost and will increase your premium amount.
Every minute detail related to your life and health impacts the premium you pay. Things like your number of dependents, your marital status, your coverage amount, your plan, and your financial status will have an impact on the final premium amount. Hence, it is always advised to disclose all information related to your health while buying a term insurance plan, as hiding anything may lead to your claim getting rejected.
What Are the Steps to Use The Term Insurance Premium Calculator?
Using a term insurance premium calculator is super easy. Following are the steps to follow while using the Term Insurance Calculator.
- To use the Insurance Premium Calculator, enter your personal details such as gender, name, date of birth, email address, contact details, annual income, and the life cover amount required.
- Select if you are a smoker or a non-smoker. And click ‘Proceed’.
- Now is the time to select policy related details such as the life cover premium, plan option, policy tenure, payment frequency, i.e., annually, half-yearly, quarterly, or monthly along with the income type (monthly, lumpsum, or a combination of monthly and lumpsum).
- Choose from different riders such as critical illness benefit, accidental death benefit and/or hospital cash benefit. These riders provide enhanced protection to you and your loved ones.
The term insurance premium calculator tool helps you with an estimated premium amount within minutes. You can always increase or decrease your premium amount based on your budget and family requirements.
How Much Life Cover Do I Need?
No one likes to put their family under any financial burden, and hence, financial security is what we all aim for. And the need to buy a term life insurance plan has increased during these unprecedented times.
We all know that buying a life insurance policy with adequate cover is important for all of us, yet we find ourselves in situations where we don’t know what the right amount of coverage is for us. Hence, we are trying to help you answer this question simply: "How much life cover insurance do I need?"
Let’s look at the answer with a simple illustration.
Samay is a 35-year-old, working individual, with a family of 3, his wife and two children aged 5 years and 8. Samay’s family depends on his earnings, and if he passes away, they would certainly face financial hardship.
Samay’s monthly expenses come up to about ₹50,000, and he also pays an EMI of ₹20,000 for his home loan, out of which ₹60 Lakhs is still outstanding.
Depending upon Samay’s current position in life, let’s discuss and decide what is the right coverage amount for him and his family.
- Step 1: What are Samay’s monthly expenses?
Samay has a monthly expense of ₹50,000, which comes down to ₹6 lakhs every year. To keep his future financial income stable, Samay will first have to take inflation into consideration (let’s assume inflation is 15%). He will also have to take into account the increasing cost of education and healthcare for his elderly parents. As a result, his future household expenses, assuming 15% inflation, would be ₹90 lakhs. Due to all these reasons, it is always recommended to have a life cover value that is 10 to 15 times your current expenses.
- Step 2: What are Samay’s liabilities?
In this case, Samay has a current liability of ₹60 lakhs that he needs to take care of so that his family does not face any financial burden when he is gone.
- Step 3: What are Samay’s life goals?
Samay wants to provide the best education for his kids. And being a smart and responsible parent, he has already set aside a monthly SIP of ₹7,000 for the next 15 years to manage a corpus for their higher education. His untimely death may put these goals in jeopardy. Hence, he needs to save ₹12.6 lakhs.
Also, Samay needs to plan a smooth retirement for his spouse and himself. An amount of ₹60 lakhs would help Samay’s wife retire in peace in case of his absence.
- Step 4: How much is Samay’s existing wealth?
You not only need to keep your financial liabilities in mind but also need to consider how much wealth you already have while calculating the life cover amount. These can be investments you have made over the years, or wealth you have acquired from your family. Let’s assume that Samay has an existing wealth of ₹20 lakhs that can be used by his family in the event of Samay’s absence.
Now that we know the financial investments, goals, and liabilities, it will be easy for us to estimate the amount of life cover that will be helpful for Samay and his family in case of his sudden demise.
| Investment & Savings | Reference | Amount in ₹ |
|---|---|---|
| Future Household Expense | Bills, education fees, lifestyle cost etc. | 90,00,000 |
| Financial Liability | Housing Loan | 60,00,000 |
| Future Goals | Children’s Education, Retirement Corpus | 12,60,000 + 60,00,000 |
| Investments | Mutual Funds, Real Estate, Stocks etc. | 20,00,000 |
| Term Insurance Cover Required | Company | 2,02,60,000 |
Term Life Insurance Cover needed by Samay will be around ₹2.03 Crore.
Your age, current investments, and stage of life are all important factors in determining the term life insurance coverage required. Our online term insurance calculator helps you to know how much life cover you need and how much premium payment is required for this.
So, what is the Right Time to Buy Term Insurance Plan?
The answer to this question is quite simple: buy it as soon as possible. Reason being that your premium payout is much lesser when you are younger. This means you pay less than what a person might pay for the same plan in their 30s or 40s. When you are younger, you have less health issues, and few or no financial liabilities and hence you can pay your premiums easily and enjoy the cover for life. Let’s understand it using various life stages below :
- When you're in your early twenties, your expenses are significantly lower than those of others. It is the perfect time to plan for your future financial security. Term insurance premium is quite reasonable at this time, and you can also save money on taxes, making it the best time to get term insurance products.
- When you're in your late twenties and married, you've just begun, or will soon begin, a new chapter of your life. This is the ideal moment for a newly wedded couple to invest in a term insurance so that they may build a strong financial foundation for their family that will expand over time. A term life insurance policy purchased at this point will need to provide higher coverage than your previous investments.
- When you've become a parent, your obligations increase at this point in your life. Education, extracurricular activities, other similar expenses, and medical expenses all take a back seat. This is the time to consider safeguarding your family and ensuring their financial security while you are away. Your long-term debts should be covered, and you'll need to safeguard yourself and your family with a term insurance plan. Ensure that your kids have a secure future no matter what happens to you.
- When you're getting ready to retire, it may not be the best time to acquire term insurance. Once your children have graduated from school or are pursuing higher education, you should begin planning for your post-retirement years. This is the time to start looking for decent pension plans that will suit you and your family. It's also crucial to consider the possibility of an untimely death and how your investments will support your family after you're gone.
Check out our term insurance calculator to see how the premium varies depending on the stage of life you are in.
For How Long Should I be Covered Under My Term Plan?
Most insurance companies cover customers until they are 75-85 years old, while others may cover them until they are 99 years old. The length of a term insurance policy matters as the coverage amount differs for different plans and duration. You should consider how much money your loved ones will require if something occurs to you, and on that basis decide the length and coverage amount for your plan.
- For someone in their 20s : Term insurance is purchased based on your present age and retirement goals. Let's imagine you're in your twenties and aim to retire at the age of 60; you'll need a 40-45-year term plan. This plan will cover you till you reach the age you want to retire.
- For someone in their 30s or 40s : It’s likely that you have entered a new phase of life by getting marriage or becoming a parent. Depending on the size of your family, business expenses, employment type, and retirement plans, you should choose a 35-40-year term insurance policy at this age.
- For someone in their 50’s and later : When you're older, your children will most likely be settled, and you'll have less of a need to work and pay bills. You can choose a low-priced term plan at this age because you've already lived more than half your life. You must consider a 15-25 year insurance plan.
Premium amount for your term insurance plan varies per individual, since they are calculated based on characteristics such as age, health, and life expectancy. You must ensure that you are not withholding any vital information about your health from the insurers. Your medical records and any underlying illnesses, if any, must be disclosed when purchasing insurance. For the duration of your term, your premiums will be fixed. The company will pay the face value of the policy if the policyholder dies during the policy term.
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3: As per provisions of Income Tax Act, 1961. Tax benefits are subject to changes in tax laws.
9: Riders are Optional and available at extra cost.
Edelweiss Tokio Life - Accidental Total and Permanent Disability Rider is only an Individual, Non-Linked, Non-Participating, Pure Risk Premium, Health Insurance rider. UIN 147B001V04
Edelweiss Tokio Life - Accidental Death Benefit Rider is only the name of an Individual, Non-Linked, Non-Participating, Pure Risk Premium, Health Insurance Rider. UIN 147B002V04
Edelweiss Tokio Life - Critical Illness Rider is only the name of the Individual, Non-Linked, Non-Participating, Pure Risk Premium, Health Insurance rider. UIN 147B005V04
Edelweiss Tokio Life - Waiver of Premium Rider is only the name of the Individual, Non-Linked, Non-Participating, Pure Risk Premium, Health Insurance rider. UIN 147B003V05
Edelweiss Tokio Life – Income Benefit Rider is only the name of an Individual, Non-Linked, Non-Par, Pure Risk Premium, Life Insurance Rider. UIN 147B015V02
Edelweiss Tokio Life - Hospital Cash Benefit Rider is only the name of an Individual, Non-Linked, Non-Par, Pure Risk Premium, Health Insurance Rider. UIN 147B006V03
Edelweiss Tokio Life - Zindagi Protect (UIN: 147N078V02) is an Individual, Non-Linked, Non-Participating, Pure Risk Premium/Savings, Life Insurance Plan. Please know the associated risks and the applicable charges from your Personal Financial Advisor or Intermediary. Tax benefits are subject to changes in the tax laws. The tax benefits under this Policy may be available as per the prevailing Income Tax laws in India. For more details on risk factors, terms and conditions please read the sales brochure carefully before concluding a sale.
Flower & Edelweiss are trademarks of Edelweiss Financial Services Limited; Tokio is Trademark of Tokio Marine Holdings Inc. and used by Edelweiss Tokio Life Insurance Co. Ltd. under license.
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CIN: U66010MH2009PLC197336 | Product UIN: 147N078V02 | ARN:WP/3591/Jan/2024
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