A term insurance policy is an excellent means of securing the future of those you love. Even in death, you can rest assured that their every need will be met, their financial liabilities will be lessened, and they can pursue their goals. However, choosing the appropriate sum to secure your family’s needs without disrupting your current finances can be challenging. That is where a term insurance calculator becomes your best friend.
What is the term insurance calculator?
A term insurance calculator is an online financial gadget that is usually available on your insurer’s website or app. It is a useful tool that helps you determine your premium based on your preferences and financials.
The term insurance calculator generates an accurate idea of your expenses and investment in the term insurance policy. It also helps you determine how you can space out your payments without causing yourself any financial burden. The most important aspect of a term insurance calculator is that you can adjust the parameters of your term insurance policy to derive a suitable financial plan that works for you.
How to use a term insurance calculator?
A term insurance calculator is fairly easy to use. You need to input your choices and certain personal details based on which the calculator will derive the most suitable payment plans for you. Here is a step-by-step breakdown of how to use the term insurance calculator to your advantage:
- You must start with a few personal details such as your name, cell number, e-mail address, age, gender, PIN code and smoking habits. Your personal contact information allows the insurer to contact you with the personalised plan, whereas your age, gender, and smoking habits play a role in determining the minimum premium. Your area code is important to determine the risk factor in your life.
- Next, you will need to furnish details about your education and occupation.
- Based on the above details, the term insurance calculator will present a few suitable options for term insurance plans for you. You can go through the advantages and select the type of term insurance plan that suits your needs.
- You will need to submit documents such as an Aadhar card, PAN card etc., to support your financial situation, proof of residence, age, and other personal details.
- The final step of the term insurance calculator will help you determine your premium. You will need to make the following selections:
- Sum assured.
- Policy tenure.
- Premium paying duration.
- Premium paying frequency.
- Death benefit payout.
Based on your preferences, the term insurance calculator will determine the total premium that you need to pay. It will divide it by the premium frequency and premium duration and share a reasonable rate of premium that you can pay at the regular intervals you choose.
If you feel like the premium is too low or too high, you can adjust the parameters to come to a more suitable conclusion. If the premium is too low, you can increase the sum assured, whereas if the premium is too high, you can probably extend the premium paying duration or reduce the sum assured based on your needs.
What are the term insurance eligibility criteria?
A term insurance policy is the easiest and most affordable life insurance plan. Most insurers do not issue a lot of rules regarding the eligibility criteria. However, they do insist upon basic transparency when applying for a term plan.
Here are the most common term insurance eligibility criteria that you must consider:
- You, or the policyholder, must be an Indian citizen. It is acceptable if you are a Non-resident Indian, or NRI, as long as you hold Indian citizenship.
- You must be honest about your smoking habits. The premiums for smokers are slightly higher than for non-smokers due to the increased health risks.
- You will have to undergo a thorough medical test to prove that you are healthy and devoid of critical illnesses or long-term chronic illnesses. You can still apply for a critical illness rider if you suspect it, but you must have a relatively clean bill of health.
You will have to submit the necessary documents to support all your declarations in the term plan application form. You must furnish the correct details, as any misinformation could void your policy upon discovery.
Conclusion
A term insurance calculator makes it easier to acquire a suitable term plan that secures the future of your loved ones. It serves as a precursor to determining your term insurance eligibility criteria. Based on the results of the term insurance calculator, you can make adjustments to your desired plans and your lifestyle so you can secure your family with a viable insurance solution.
The term insurance calculator also helps you choose a suitable plan by providing an accurate glimpse into your term plan investment. You can plan your financials around it and determine if your chosen policy is right for you.