A term plan is a pure form life insurance policy that provides financial cover to the nominees of a policyholder in case the insured passes away before the end of the policy term. It offers huge covers for affordable premium and its popularity is rising. Various insurance companies provide a variety of term policies. You can use an insurance calculator to compare term life insurance policy rates among different insurers and find the best deals easily.
Steps to use a term insurance calculator
To find out the rates of different term policies with the calculator, you need to provide certain details first. Here are the steps to do so:
- Enter information regarding age, gender, the sum assured, duration of the policy, whether you are a smoker, and other details as asked by the calculator
- Provide your name, city of residence, email address, and phone number where you will receive an OTP that you need to proceed further
- Mention if you want the death benefit to be paid as a lump sum or monthly income
- Analyze the available term plans with associated premiums, as shown by the calculator, so you can easily compare and choose
The parameters used by the calculator
For the term life insurance price comparison, the calculator uses the following parameters:
- Sum assured
The sum assured is the amount of money the insurer pays to your nominees when a death claim is made. You need to keep your monthly household expenses, education and marriage of your children, and inflation in mind when deciding on how much sum assured should be enough for you.
The higher your age is, the greater would be the risk of mortality. Hence, the insurers charge high premiums for policyholders who are aged. Buying the policy at an early age will result in a lower premium.
Statistics have shown that women have a longer lifespan compared to men. So, the insurance companies offer a lower premium rate for women policyholders, as they have a lower risk of mortality.
- Policy term
The term or the duration of the policy is one of the aspects that determine the premium. A longer term results in higher premiums, with options to pay them throughout the term, single payment, and limited premium pay. Therefore, you must keep these factors and decide the policy term accordingly.
The term insurance calculator also requires you to provide details regarding your smoking habits. Regular smokers have a mortality risk; hence, they have to pay a high premium.
The benefits of using the calculator
A term insurance calculator helps you to decide which insurer has the best options for you. The calculator is designed to make sure that anybody can use it. It requires only certain details that you have to provide and get helpful data that makes it easier to compare between different term policies. You can also alter the parameters to find which scenario leads to the result you want.
When buying a term plan, you need to first determine the amount of coverage that is sufficient for your loved ones. The calculator will help you with the rest.