A Handy Guide to Term Insurance Premium Calculator

A Term insurance plan is a life insurance policy that covers the individual for a specified time period, called term of the policy. Basically, a standard term insurance policy pays out a lump sum, called death benefit, to the policyholder’s family I the unfortunate event of his demise during the term of the policy, provided the policy is in complete force.

Term Insurance Premium CalculatorA Term insurance Premium Calculator is an interactive and highly useful tool that helps a prospective buyer in evaluating, comparing and planning his life insurance cover by picking on the policy that most suits his financial portfolio. A Term Insurance Premium Calculator, therefore, helps the user create a precise picture of his insurance needs. The user is only required to fill in some specific data so as to obtain accurate results from the premium calculator. Given below are some of the fails required to be filled in by the user:

Proposer’s Name Gender Date of Birth Age Type of Plan Purchase years of the plan Policy Term Total payable premium Premium Payment Term Sum Assured Tax Riders (if any)

Feature Description

User-friendly

A Premium Calculator is an easy and accessible financial tool. A user just needs to key in the mandatory information in order to obtain the information he is looking for

Features of Premium CalculatorsThe table given below depicts the salient features of a term insurance premium calculator and their brief description:

CoverageA Term Insurance Premium Calculator helps the user find out the accurate coverage essential to secure his family in unfortunate event of his untimely demise

Analysis

Just by providing some vital information such as age, gender, and some details about the prospective term plan, the consumer can evaluate the benefits of that plan with respect to its cost

Makes complex data simple to understand

Most buyers find is difficult to understand the financial data and tax computation associated with insurance policies. While, a premium calculator simplifies the task in a jiffy

Handy toolThis tool is handy and quick to use and thus, allows to consumer to make an immediate evaluation of the term insurance policy and its functionality

Imparts detailed product awarenessThis tool due to its simplicity and preciseness helps the user understand the various products offered by innumerous insurers in a better manner

ComparisonA term insurance premium calculator allows detailed comparison of suitable plans and thus assists the buyer in making an informed choice

Allows Customization

A Premium Calculator allows the buyer to enter accurate details regarding the plan, such as preferred term cover, and premium paying term, along with his personal details, such as age, gender, etc.

Working of a Term Insurance Premium Calculator Rahul Batra, a 28-year old male, who is a non-smoke and works in a multinational company, buys a tem insurance policy from a renowned insurance provider on 17th October, 2015. The plan he has purchased is a non-participating traditional term insurance policy. Accurate details of Rahul Batra are as given on next sheet:

User Details Description

Name Rahul Batra

Age 28 years

Gender Male

D.O.B. 14th February, 1987

Smoker or Non-Smoker Non-Smoker

Following are some more details required to be entered in the premium calculator:

Sum Assured Rs. 1,00,00,000

Policy Duration or Term of the Policy 30 years

Premium Payment Term 30 years

Premium Payment Frequency Yearly

Option of the Plan Selected

Life Option, under which the policyholder’s family, in event of policyholder’s demise during the policy term, gets the sum assured in the form of a lump.

On entering the abovementioned details into the term insurance premium calculator, the user would obtain the following results:

Yearly Premium (excluding taxes) Rs. 8,000 (approx.)

Applicable Taxes Rs. 1,100 (approx.)

Total Premium Rs. 9,100 (approx.)

Due date of premium payment 17th October, 2016

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