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How to calculate Term Insurance premium without hassles?

When you prefer using an online premium calculator, you will have to fill in specific details. Follow the below steps to choose the best term insurance policy for you.

By Newsd
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How to calculate Term Insurance premium without hassles?

Being the family’s breadwinner, all of us strive hard to give the best without any hassles. But as they say, life is uncertain. An untimely death of a breadwinner can lead to a financial problem. The question that arises is about how your family will fulfill their needs and aspirations in your absence. 

Although it may sound unrealistic, you can certainly make arrangements for your loved ones for your family’s well-being post your demise. You can opt for a term insurance policy that would offer your family financial help in tough times. 

However, knowing what is term plan is not enough. To get the best term policy in India, you will have to research thoroughly. The traditional way of buying insurance involved dependence on agents, brokers, consultants, and professionals in insurance company offices. But over the years, this method has proved to be inefficient and costlier. Instead, you can opt for an easy way to buy term insurance online. 

Emergence of Online Insurance Options

With the continually advancing technology, online insurance purchase is rapidly growing in popularity. Last year, India had nearly 700 million Internet users across the country. This figure shows that people trust the online medium. The online mode directly engages insurance-seekers through portals and ensures seamless purchase of the insurance product.  

The online mode of purchase serves another purpose. It helps you buy a term insurance policy by simplifying the process for you. Usually, all insurance companies provide a premium calculator on their websites. You can use this to understand your requirement and proceed with buying a term insurance policy.

Using an online premium calculator, you can compare and analyze different plans to understand their differences. It will help you know which plan suits your budget with an easy comparison. An online premium calculator saves time as is cost-effective.

While using an online premium calculator helps you evaluate your term insurance policy premium without hassles, there are some crucial factors you should consider. When you prefer using an online premium calculator, you will have to fill in specific details. Follow these steps to choose the best term insurance policy for you:

  • Enter the Right Sum Assured

Before selecting the sum assured amount in the online premium calculator, you should estimate your annual household expenses. You should take the base amount in your calculations for the sum assured to be 15-20 times the household expenditure. In addition, the number of dependents should also be considered.

If an unforeseen situation leads to your demise, your income source will have to be compensated for by the coverage amount. In such scenarios, it is crucial to account for expected increases in your salary. Also, consider the inflation factor as it can create significant increases in the expected household expenditure.

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  • Choose a Longer Policy Period

It will be beneficial to opt for an extended policy period when buying term insurance. Most term policies in India offer fixed premium rates. Hence, after the product is purchased, the premium would remain the same for the policy’s entire duration. And if you are young, the premiums will be lower and will remain so throughout the term. The best aspect is that you will remain insured for the entire policy term. 

Thus, you will have a minimum premium to pay and get coverage for a longer period. Rest, you have to take into account your liabilities and for how long they will last. Factor in your retirement plans and then choose among the available term policies in India. Generally, most policy terms mature at the age of 65, so you can decide your policy’s tenure as per your present age.

  • Choose a Suitable Mode of Premium Payment

There are different premium payment modes available. You require selecting one when you use an online premium calculator. These include single, regular, and limited premium payment options. It would help if you consider your financial planning and then make your choice. If you opt for the single-mode of premium payment, you will have to make a one-time payment, regardless of your term insurance policy duration. 

With regular payments, you require paying the premium payment periodically, at a recurring frequency. You can opt to pay premium monthly, half-yearly, or annually depending upon your choice. And with the limited premium payment option, you will have to pay the entire policy’s premium in a limited period. 

  • Choose to Include Riders

Choosing riders for your term insurance policy is an option. You should consider adding them if you require the critical illness cover, waiver of premium, or any additional benefit. On adding any of the riders, the premium amount will increase. However, in times of dire need, you will get more coverage. 

If you choose the critical illness cover, you will get an additional coverage amount on the ailment diagnosis. But this benefit pertains to the policy tenure.

Apart from these essentials, you will have to enter some personal details like age, income, gender, and others. Once you provide this information, the online premium calculator evaluates the premium amount within seconds. This entire process makes purchasing the apt term insurance policy an easy task.


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