Know how a term insurance premium calculator works

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An insurance plan like a term plan is definitely worth all your hard earned money. You know why? That’s because of the fact that it provides you with a life cover for a specific term. Due to this, it got its name called the ‘Term Insurance.’ Additionally, it is the most preferred option by Indians due to its assurance as well as protection.

On the contrary, understanding only the working of a term policy isn’t enough. Behind the accuracy of a term insurance plan lies the proper functioning of a term insurance premium calculator. So if you’re wondering about how to operate it and understanding its working, then go through this guide for more details on it:

What is the term insurance premium calculator?

Term insurance premium calculator is a tool that allows you to calculate the accurate amount of premium that is supposed to be paid for your selected plan. It also helps you to get a clearer picture of all your insurance requirement. Besides, these calculators allow the users to not only analyze but also compare it with other insurance options.

A term insurance premium calculator is categorized into two main types. First, it is called as a calculator with sum assured as a basic unit which allows the users to decide the sum assured. The second is a calculator with income as a basic unit which generates sum assured for the user before arriving at the premium amount.

Given are the features of term insurance calculator for a better understanding. Therefore, take a look at it before using the calculator:

  • User-friendly
  • Product knowledge
  • Customization
  • Analysis & comparison
  • Coverage

How does it work?

In order to get started with the calculator, follow these 4 steps in order to achieve its efficiency and effectiveness. The entire working of a term insurance calculator can be finished in these steps that are mentioned below:

Step 1: Submit all your personal details like name, gender, DOB, marital status, number of children, and finally, your annual income. At times, there can also be details where you might be required to fill in about your smoking habits.

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Step 2: Include either the amount of your insurance or your annual income.

Step 3: Choose from the additional benefits given which are accidental cover and disability cover or a critical illness cover.

Step 4: Select between the two estimates offered by a term insurance calculator. These two estimates are the mode of premium payment and mode of claim settlement.

There are also other details you must know that is required for the working of your calculator. These are the following things needed while using the calculator:

  1. Proposer’s name
  2. Date of Birth
  3. Sum Assured
  4. Plan type
  5. Age
  6. Gender
  7. Policy paying term
  8. Premium paying term
  9. Tax
  10. The total amount of premium payable
  11. Year of the purchase of the plan
  12. Riders
  13. Other details about the sub plans

Now that you know how a term insurance premium calculator works, when would you utilize a calculator for accuracy purpose?  Keep all these important factors and steps in mind for the smooth functioning of your calculator. In case, you fail to understand the intricacies, you can always take help of an expert who is well versed with not only the functioning of a calculator but also term insurance plan, as a whole.

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