The unpredictability of life makes it an incredible adventure to live every day to the fullest. However, the uncertainty can also be unnerving, which is why having a suitable term insurance plan to help protect the future of your loved ones is an incredible gift.
What is term insurance?
Term insurance is a form of life insurance policy that protects your family’s financial well-being in the event of your untimely demise. You choose a suitable sum assured and a policy tenure. You may also choose the frequency of paying the premium and the duration for which you will be paying premiums to validate your term plan.
In case of your unfortunate demise during the policy tenure, your loved ones receive the death benefit. If you survive the tenure of your policy, you may receive the maturity benefit. Term insurance is a very popular life insurance plan for those who prefer reasonable rates of premium. You can use a term insurance calculator to determine your premium before you purchase the policy.
What is a term insurance calculator?
A term insurance calculator is a financial instrument that helps simplify the process of picking a term insurance policy that makes financial sense to you. It takes into account the major parameters of your policy plan and helps determine a reasonable rate of premium that works for you.
Here are the details that you need to input in a term insurance calculator:
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Your details such as name, age, gender, contact number, email address, and pincode.
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You also need to share any smoking habits that may be part of your lifestyle since it affects the life insurance policy.
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You need to determine the type of term insurance plan that befits your specific needs and those of your loved ones.
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You need to input the sum assured for which you wish to ensure your family’s future.
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You must share the policy tenure, which is essentially the validity of your term insurance plan. This is the term of the policy during which if you meet an unfortunate demise, the insurance provider pays the death benefit, and if you survive the tenure, you receive the maturity benefit subject to terms and conditions.
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You must also share the frequency of premium payments and the premium tenure in the term insurance calculator. The premium tenure is usually shorter than the policy tenure and it is the duration for which you will be making regular payments toward your term insurance policy to avail of the benefits.
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You will have to input any term insurance riders that you want to add to your policy.
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You will also need to share your highest education qualification, details of your profession, and your annual income.
Each of these details that you provide for the term insurance calculator plays a vital role in determining a personalised premium plan for your convenience.
Benefits of using a term insurance calculator
There are several benefits to using a term insurance calculator before choosing your policy, which are as follows:
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A term insurance calculator takes into account your specific circumstances including your expectations for your family’s future, your location and lifestyle which determines the risk factors, your income and financial stability, and more.
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The term insurance calculator personalises a premium plan that is good for you rather than a generalised plan that may work for others as well. Therefore, the rate of premium will be affordable based on your specific financial needs and situation.
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You can use a term insurance calculator to compare different term insurance types and pick the one that would benefit you and your loved ones the most.
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When you use a term insurance calculator to figure out your rate of premium, you will receive a personalised quote on your means of contact. Therefore, you will always have it available. You can then use it to plan your finances accordingly by factoring in the premium that you need to pay, be it monthly or yearly, as per your predetermined frequency.
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There is absolute financial transparency from the insurance provider when you use a term insurance calculator. It factors in every aspect, including the premium frequency and tenure so you know exactly how much premium you are paying in total. Additionally, it also takes into account the term insurance riders that you want to include for added benefits so there are no hidden charges that can catch you off-guard.
A term insurance calculator is the ultimate tool to help you choose the perfect policy plan for your family.
What are term insurance riders?
One of the best things about having a life insurance policy is that you can customise it according to your needs. Term insurance riders are add-ons that you include with your policy to escalate the sum assured or prepare for special circumstances that may become applicable to your health issues in the future. Here is a list of some of the preferred term insurance riders available in India:
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Critical illness riders -
There is a list of critical illnesses against which you can be protected. If your untimely death is a cause of one of these critical illnesses, you receive added coverage on your sum assured. -
Accidental death riders -
If your premature demise during the policy tenure is due to an accident, your beneficiaries receive a bonus on the sum assured as the death benefit. -
Return of premium -
If you survive the tenure of your policy but don’t have a maturity benefit included in your plan, then you can add the ROP. The insurance provider will then pay all the premiums that you invested over the premium tenure back to you. -
Waiver of premium -
In case you succumb to a disability that prevents you from making premium payments, the WOP helps negate the need for it. Your term insurance stands true but you are no longer obligated to pay the premiums. -
Family income benefit riders -
Instead of the complete sum assured in one lump sum amount, the insurance provider pays your beneficiaries at regular intervals. This helps them meet their financial needs in your absence and also aids in financial planning.
You can choose term insurance riders that are necessary for your family and you.
Conclusion
Term insurance calculators help maintain transparency when choosing your policy plan. You can account for term insurance riders as well as your specific circumstances when selecting your policy and prepare your financial obligations accordingly.
