Not Sure How to Use a Term Insurance Calculator?

With all the uncertainties and unpredictable circumstances that life throws up, it helps to have term insurance that can provide financial coverage when you are not around. You can use an online term insurance calculator to easily estimate the amount of money your family will need in your absence.

Before delving deeper into understanding and using a term insurance calculator, it is important to have an overview of term insurance.

Term Insurance

Term insurance is a type of life insurance that provides insurance coverage to your family if anything unfortunate happens to you. It can provide your family with a lump sum amount or fixed amount for a certain period as per the terms and conditions of the plan.

A regular life insurance policy generally comes with survival benefits where you get a certain amount in case you survive the policy term. Term insurance, generally, will not provide you with any reimbursement on your survival after the completion of the policy period.

However, there are a few reputed term plans that provide the maturity benefits on survival.

Benefits of Term Insurance

Term insurance has gained significant popularity in India because of the benefits it offers.

● High Coverage at Affordable Prices

You can buy a significant amount of insurance coverage under a term insurance plan at a very low price. Therefore, the monthly or annual premium of such plans is unlikely to put a strain on your budget.

● Income Tax Benefits

You can also get the following income tax benefits, under the Income-tax Act, on your term insurance.

○ Section 80C

Premium payments of up to Rs 1.5 lakh, are eligible for annual tax deduction under Section 80C

○ Section 80D

You can claim a tax deduction of up to Rs 25,000 per year under this section on premiums paid on optional riders such as critical illness, hospitalisation, etc.

○ Section 10(10D)

In case of death, the total amount payable to the beneficiaries as maturity benefits is tax-free under this section.

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What is a Term Insurance Calculator?

It can be extremely difficult for an average person to determine and plan the premium amount that can provide adequate insurance cover to his/her family. Furthermore, there are many factors involved such as

● Age of the applicant

● Gender

● Income

● Smoking habits

● Insurance tenure

● Frequency of premium payment

● Sum assured

● Additional riders, if any

A term insurance calculator is designed to save you from the hassles of going through a lot of complex calculations to arrive at an agreeable premium amount.

It is an online software application provided by the insurer that helps you to choose the best plan for you. It allows you to customise your plan by allowing you to choose parameters such as coverage amount, premium payment frequency and additional riders.

Why Should You Use a Term Insurance Calculator?

● Saves Time

Manual researching to choose the right plan for you can be a time-consuming process. Besides, you may still find it difficult to get the required estimates.

However, an online term plan calculator can do the job for you within a few minutes. You only need to provide a few details and the rest will be handled by the term insurance calculator.

● No Documentation Required

You don't need to provide any documents to use this facility. Just visit the webpage that hosts the application, and you are free to use it.

● Compare Various Options

Term insurance plans come with different additional riders that you may or may not need. With the help of a term plan calculator, you can mix and match different riders to see which one suits your needs better.

● Helps in Planning

Term insurance calculators instantly generate results. This can be immensely helpful in properly planning your budget before finalizing details such as premium payment amount, payment methods, frequency, etc.

How To Use The Term Insurance Premium Calculator

Anyone with a basic knowledge of the internet can use a term insurance calculator by following these five easy steps.

1. Log on to the internet.

2. Visit the website of the insurance service provider.

3. Select the term insurance calculator.

4. Fill in the details to get your quote.

5. Submit the details to get your customized quote.

What Is the Reliability of Such Term Insurance Calculators?

Online term insurance calculators are arguably more reliable than the traditionally practised manual calculations. Manual calculations have certain limitations because

● They are time-consuming

● They are prone to mistakes and human errors

● It is not possible to provide multiple results.

On the other hand, Online term insurance calculators have the following benefits

● They are fast and accurate.

● Due to fully automated calculations through back-end programmes and algorithms, there are fewer chances of calculation mistakes or other errors.

● You don't have to worry about manually putting the premium rates.

● They are capable of generating multiple results within a few minutes as per the variables provided by the user.

● They can provide you with a seamless, interactive, and hassle-free experience through a user-friendly interface.

● They offer you the convenience of choosing and assessing the right term plan from the convenience of your home.

The world of insurance has come a long way from its early days of doing cumbersome research spanning several days or months. In this day and age, everything is online and easily available at your fingertips.

Term insurance is no different. Use a term insurance calculator to easily find out which term plan suits you the best. Gift your family and loved ones the required protection and buy yourself peace of mind.