Mumbai (Maharashtra) [India], November 21: A Term Plan is a kind of Life insurance offering life insurance coverage at an affordable premium cost, where the death benefit is paid to the family members of policyholder in an event of an unfortunate death of the policyholder. The payout amount can assist the family members in meeting the financial needs, making payments towards loan and debts, children fees and other expenses.
A Term Insurance Plan Calculator is anonline tool available free of cost, used to calculate the premium amount for a term insurance plan. Once the necessary inputs like age, income, gender etc. are provided, the term plan calculator analyzes the adequate coverage amount required to protect your family. Also, it recommends the best term plans available with different insurance provider companies.
Steps on How a Term Plan Calculator Works
Provided below are the steps on how a term insurance calculator works:
Step 1: Provide Information
Provide the information and details like name, gender, contact number, date of birth, any other information required so that the apt plan can be suggested.
Step 2: Estimate the Coverage Amount
This calculator will help you to get an estimate of the coverage amount that is required to fulfill the financial objectives in an event of unfortunate loss. The estimation will be dependent upon what you provide as an input and the how you assess the risk. The terms of the term policy can be changed to know the amount of premium.
Step 3: Calculate the Premium
It helps to ascertain the premium amount that is required to pay the desired coverage amount. Also, the additional riders can be added to increase the coverage of a term plan.
Step 4: Compare different Term Plans Available
You can then compare the quotes offered from different term insurance plans at a competitive rate customized according to your requirements.
Step 5: Customize
It allows users to customize the amount covered, tenure of policy, add on features, and other criteria’s, if any.
Step 6: Get the Result
Depending on the data provided, you will get an estimated amount of premium to be paid towards the term insurance plan. You can hence get a clarity which allows to make an informed decision about the term insurance plan, aligning the financial objectives with your budget.
Documents Required
Mentioned is the list of documents required to avail a term plan:
1. Recent Photograph
• Colored Photograph
2. Photo ID Proof (Any 1)
• Aadhar Card
• Passport
• Driving License
• Voters ID
3. Age proof (Any 1)
• Aadhar Card
• Passport
• Driving License
• Birth Certificate
• Baptism Certificate or PAN card
4. Address proof (Any 1)
• Aadhar Card
• Passport
• Driving License
• Voters ID
5. Income Proof (Any 1)
• Last 3 month of salary slip and 6 months of bank statement showing salary credit (In case of Salaried Individuals)
• Last 2 Years ITR and computation of Income (In case of Self-Employed Individuals), etc.
Benefits of Term Insurance Calculator
Provided below are the benefits of Term Insurance Calculator:
• Accuracy
It helps to calculate the accurate coverage amount depending on the financial situation ensuring you are neither under nor over insured.
• Saving of Time
You will get instant quotation, which allows to eliminate the requirement of calculating the premium amount and coverage amount manually.
• Cost-Effective
It offers cost effective term insurance plans as per your required budget.
• Comparisons
To choose the most apt term insurance plan, the term plan calculator allows you to compare the different quotes available from different insurance companies.
• Transparency
There is complete transparency in the amount of premium, details of the policy, sum assured, aiding to make an informed decision.
• Free of Cost
It is totally free of cost, allowing you to make informed financial decisions.
• Convenience
It can be used at your convenience i.e. at any time and from anywhere from the comfort of your home or office.
Factors affecting the Calculation of Term Insurance Premium
The insurance companies after thoroughly reviewing all the applicants and making assessment of various aspects, calculates the amount of premium. Like, in case of young applicants, where there are no health concerns, the premium amount will be quite low. On the other hand in case of an old applicant having health issues, the premium amount would be on the higher side. Mentioned are the factors affecting the calculation of term insurance premium:
• Sum assured of the term insurance plan
• Age of the applicant
• Gender of the applicant
• Health status of the applicant
• Characteristics of the policy, like additional riders, tenure of policy, kind of policy, etc.
• Mode of purchase of plan can be offline or online
• Premium payment method
FAQ’s
1. What happens if a Term Insurance Calculator is not used?
If a term insurance calculator is not used, it might result in the below mentioned situations:
• Overpayment
It is quite possible that you would have to pay the premium amount on the higher side. Also, you will not get to assess the exact amount which will suit your budget and the requirement.
• Underinsurance
You might fall short in assessing the coverage amount of insurance to get the protection. It means you might not get enough financial support in case of any uncertain situation.
• Financial Stress
As the term plan calculator helps in analyzing the amount of premium, but if the calculator is not used there might be financial stress due to whether the insurance can be afforded or not, affecting the planning and mental peace.
Conclusion
Term Plan Calculator is a tool that assists in calculating the premium amount of a term insurance plan, which can either be purchased either online or offline through a registered insurance company or an agent. The more accurate the data is, the more accurate the premium amount would be. The term plan calculator helps in making an informed decision when purchasing the term insurance plan. It also offers tax benefits u/s 80C, 80D , and 10(10D).
(Disclaimer: The above press release comes to you under an arrangement with PNN and PTI takes no editorial responsibility for the same.). PTI PWR
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