Term Insurance Calculator

Use the term insurance calculator to estimate premiums based on age, sum assured, tenure, and lifestyle. Know the calculator benefits, how does it work, how to use the calculator.
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3 min
02-September-2024 

Financial planning is essential, and a term insurance calculator helps individuals make informed decisions by estimating premiums and coverage accurately. This tool provides a clear picture of future financial needs, ensuring the right term plan selection. By entering details like age, income, and policy term, users can compare options and choose affordable coverage. The term insurance calculator eliminates guesswork, making financial planning straightforward and efficient. It also highlights the impact of different policy terms and sum assured amounts, helping individuals secure their family’s future with confidence. Using this tool ensures a well-planned and financially secure future.

What is a term insurance plan?

A term insurance plan is a pure life cover that offers financial protection to your family in case something happens to you during the policy term. It’s the most affordable form of life insurance, offering a high sum assured at low premiums. These plans don’t come with maturity benefits, which is why they’re perfect if your primary goal is to secure your loved ones’ future — especially during your income-earning years.

What is a term insurance calculator?

A term insurance calculator is a digital tool available on insurance providers' websites. It is designed to provide prospective policyholders with an approximate estimate of the premium they will need to pay, should they decide to avail of a term insurance plan. It considers various factors such as age, sum assured, policy term, and lifestyle habits to provide accurate calculations tailored to individual needs.

When should you buy a term insurance plan?

You might wonder — when’s the right time to get a term insurance policy? Truth is, the earlier you buy, the better. Here are the most ideal life stages to consider:

  • When you start earning: Early in your career is the best time as premiums are low, and you can lock in a rate for decades.
  • Before marriage: A policy ensures your partner is financially protected if something happens to you.
  • After becoming a parent: It secures your child’s education and living costs in your absence.
  • When taking a home loan: The payout can help your family repay the loan without stress.
  • If you have ageing parents: Your policy can support them if they depend on your income.

How does a term insurance calculator work?

A term insurance calculator helps estimate the premium amount based on key factors. It simplifies decision-making by providing an accurate cost breakdown. Here’s how it works:

1. Enter personal details:

The calculator requires inputs such as age, gender, smoking habits, and occupation to determine risk factors affecting the premium.

2. Specify income and coverage needs:

Users must enter their annual income and the desired sum assured to ensure adequate financial protection for their family.

3. Select policy term and payment frequency:

Choosing the policy duration and premium payment mode (monthly, quarterly, or annually) influences the overall premium cost.

4. Get instant premium estimates:

Based on the provided details, the term insurance calculator instantly calculates the estimated premium, helping users compare different plans.

5. Customise and compare plans:

Users can modify inputs, explore different coverage options, and select the most suitable term insurance plan for their needs.

Get a quick premium estimate to secure your future with the right term plan. Calculate premium in just a few minutes and get quote!

How does a term insurance calculator help you?

A term insurance calculator serves as a guiding light, empowering individuals to make informed decisions regarding their financial future. By inputting relevant details, users can swiftly ascertain the premium amount and coverage that aligns with their requirements and budget.

A term life insurance premium calculator basically makes the process of choosing a plan quick and stress-free. Here’s how it can guide your decision:

  • Gives a premium estimate instantly: Just enter your age, income, coverage, and policy term to see how much you’ll pay.
  • Helps compare multiple plans: It simplifies comparison across insurers based on benefits, riders, and premium costs.
  • Customises based on your needs: You can adjust coverage, add riders, or tweak the policy term to see how it affects your premium.
  • Saves time and effort: No need to visit branches or speak to agents — everything happens online in seconds.

How to use a term insurance calculator?

Using a term insurance calculator is a straightforward process:

  • Access the term insurance calculator: Visit the official website of your preferred insurance provider or a financial advisory site. Look for the term insurance calculator or term plan calculator tool.
  • Input basic personal information: Enter details such as your age, gender, and smoking habits. These factors significantly impact the premium calculations.
  • Select coverage amount: Determine the sum assured or coverage amount you need. This should align with your financial goals and the needs of your dependents.
  • Choose policy term: Decide the duration of your term insurance plan. Longer terms typically have higher premiums but offer extended coverage.
  • Add additional riders: Opt for riders like critical illness cover, accidental death cover, or waiver of premium. These riders enhance your policy but may increase the premium.
  • Enter health details: Provide accurate information about your medical history and current health status. Insurers use this data to assess risk and calculate premiums.
  • Review and compare premiums: The term plan calculator will display the estimated premium. Review the results and compare with other plans to find the most cost-effective option. Compare term plans, premiums, and coverage in one place. Get a quote now!
  • Customise your plan: Adjust variables like coverage amount, policy term, and riders to see how they affect the premium. This helps in tailoring a plan that fits your budget and needs.
  • Proceed with application: Once satisfied with the premium and coverage, you can proceed with the application process directly through the calculator interface.

Using a term insurance calculator simplifies the process of estimating premiums and helps you make an informed decision.

How does smoking and occupation impact the term insurance premium calculation?

Smoking and occupation significantly influence term insurance premiums:

  • Smoking: Smokers typically face higher premiums due to elevated health risks associated with tobacco use, including heart disease and cancer.
  • Occupation: Individuals with hazardous occupations, such as firefighters or miners, may encounter higher premiums. This is because they are exposed to increased risks of injury or death on the job, leading to a higher likelihood of claims. Insurers adjust premiums accordingly to reflect the heightened risk associated with certain occupations, ensuring that policyholders receive appropriate coverage.

If you are looking for affordable life inurance or term plans, you can visit the Bajaj Finance Insurance Mall. The platform enables you compare and find the suitable life cover and term plans offered by leading insurers based on your requirements.

Benefits of using term insurance calculator online

Here are the benefits of term insurance calculator that makes it an indispensable tool for prospective term insurance buyers.

  • Accuracy: Provides precise estimates based on specific inputs.
  • Convenience: Enables users to calculate premiums anytime, anywhere, without the need for extensive paperwork.
  • Comparison: Facilitates comparison between different insurers and policies to make an informed choice.
  • Time-saving: Eliminates the need for manual calculations, saving time and effort.
  • Budget-friendly: Assists in selecting a policy that aligns with financial capacity without overburdening expenses.
  • Multiple death cover payout options: Displays available payout choices, such as lump sum or monthly income, for better planning.
  • Tax benefits: Highlights savings on premiums under Section 80C and tax-free payouts under Section 10(10D).
  • Supports your financial planning: Helps determine the right coverage amount to ensure your family’s long-term financial security.

What happens if you do not use a term insurance calculator?

Skipping the use of a term insurance plan calculator can lead to uninformed decisions. Here's what you might miss:

  • Overpaying for premiums: Without a calculator, you might choose a plan that costs more than necessary.
  • Choosing incorrect coverage: You risk under-insuring or over-insuring yourself without knowing your ideal sum assured.
  • Missing out on savings: Some calculators apply online discounts or promotions you won’t see elsewhere.
  • Poor plan comparisons: Without a standardised way to compare, it’s hard to know if you are getting the best value.

Different types of term insurance calculator

There are various types of term insurance calculators available online, each designed to meet specific needs. These tools help users assess and compare different term insurance plans efficiently.

  • Premium comparison calculators: These calculators allow users to compare premium rates from multiple insurers side by side. By entering basic details like age, income, and coverage amount, individuals can evaluate different policies and choose the most cost-effective option that meets their financial requirements.
  • Housewife term insurance premium calculator: This calculator helps homemakers determine the premium for a term insurance policy tailored to their needs. Since housewives may not have a regular income, insurers consider factors like the spouse’s financial status and household responsibilities to provide coverage estimates that ensure financial security for their families.
  • Return of premium term insurance calculator: This calculator estimates premiums for policies that refund all paid premiums if the policyholder survives the term. Users can enter details like policy term and sum assured to check affordability while ensuring future financial security through guaranteed returns.
  • Regular plan term insurance calculator: Designed for standard term insurance plans, this calculator helps individuals determine the cost of a policy with pure life cover. By inputting personal and policy details, users can get a clear estimate of premiums for term insurance without maturity benefits, ensuring affordable financial protection for their family.

When is the ideal time to buy a term insurance plan?

The ideal time to buy a term insurance plan is as early as possible, preferably in your 20s or 30s, when premiums are lower. Using a term insurance calculator, you can determine the right coverage and premium based on your financial goals. A term insurance premium calculator helps you make an informed decision by comparing different plans and selecting the most cost-effective option.

Can a term insurance premium calculator be used without personal information?

Yes, a term insurance plan calculator can be used without providing personal details. Many online tools allow users to estimate premiums by entering general details like age, coverage amount, and policy term. A term insurance premium calculator helps individuals explore different plans and premium options without requiring sensitive information, making the process hassle-free and secure.

Factors that determine the term insurance premium

Several factors play a crucial role in determining the term insurance premium:

  • Age: The younger you are, the lower your premium. That’s because your risk of health issues is minimal when you're young, which reduces the insurer’s liability. A term plan calculator shows how premiums increase with age, encouraging early purchase.
  • Gender: Women usually pay slightly lower premiums than men due to statistically longer life expectancy. Most term life insurance calculators reflect this difference when you input your gender while checking premium quotes.
  • Medical history: If you have pre-existing health conditions or a family history of chronic illness, insurers may consider you a higher risk. This can increase your premium. Using a term plan premium calculator, you can adjust the inputs to see how health disclosures affect pricing.
  • Lifestyle habits: Factors like regular exercise, a balanced diet, and stress levels influence your health — and your premium. A healthy lifestyle often earns you better rates on a term life insurance calculator.
  • Occupation: If you work in a high-risk profession (like aviation, mining, or construction), your term insurance premium may be higher. A term plan calculator can help assess how your job impacts your coverage costs.
  • Additional rider benefits: Adding riders like critical illness or accidental death increases your premium. However, it also enhances your coverage. A term plan premium calculator allows you to add or remove riders to see how they influence the final quote.
  • Smoking and alcohol consumption: These habits significantly increase your health risks, leading to higher premiums. Most term life insurance calculators have a dedicated field to mark smoking status — and you'll see an immediate price change based on that.
  • Sum assured: The more coverage you opt for, the higher your premium. But it’s all about balance. A term plan calculator helps you find the right coverage amount that fits your needs and budget.
  • Policy term: Longer policy terms mean longer risk coverage for the insurer, which can increase the cost. A term life insurance calculator helps you adjust the term length and see how it impacts your premium.
  • Premium payment mode: Choosing monthly, quarterly, or annual payment modes can change the premium slightly. Most insurers offer discounts on annual payments, and you can explore these options via a term plan premium calculator.

Understanding these factors helps individuals make informed decisions when selecting a term insurance policy tailored to their needs and circumstances.

Low premiums, high coverage, tax benefits—term insurance has it all! Check plans, starting at Rs. 15/day*!

How much term insurance coverage does one require?

For determining the amount of term insurance coverage, one requires to evaluate several factors. A general rule is to have coverage that is 10-15 times your annual income. Using a term insurance calculator or term plan calculator can help refine this estimate by considering your debts, living expenses, future financial goals, and inflation. Account for mortgage, education costs for children, and daily living expenses. The right coverage ensures your family maintains their lifestyle and achieves financial goals in your absence. Accurate input in the term insurance calculator will provide a tailored recommendation based on your unique financial situation.

Pro Tip

Secure your family’s future against life’s uncertainties with our reliable term plans starting at just Rs. 15/day* for a life cover of Rs. 1 crore.

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Steps to buy life insurance through Bajaj Finance Insurance Mall

To buy life insurance plan through Bajaj Finance Insurance Mall, you simply need to provide a few information by following the below steps:

Step 1: Click on ‘Get Quote’ to open our online application form.

Step 2: Enter the required details – name, mobile number, email ID, DOB, and gender. Click on ‘Proceed’ button.

Step 3: Share a few more details related to your lifestyle, occupation, education, income and PIN code. Click on ‘View Plans’ button.

Step 4: You will see the plans available. Click on ‘Buy Now’ on the plan and our representative will call you back and explain the products available for you to take an informed decision.

Why should you choose Bajaj Finance Insurance Mall to buy term insurance?

If you choose to buy term insurance through Bajaj Finance Insurance Mall, you get the following benefits:

  • Comparing and purchasing policies: Bajaj Finance offers a broad selection of insurance policies from top insurers in India through the Bajaj Finance Insurance Mall. This platform allows you to assess and purchase insurance policies from various reputable providers in India.
  • 100% digital purchasing process: Bajaj Finance prioritises customer convenience by providing a fully digital platform for the purchasing process. This means you can buy insurance policies with minimal paperwork and without any hassle.
  • Cost-effective premiums: Bajaj Finance, in collaboration with leading insurance providers, presents insurance policies tailored to individual needs. These policies offer extensive coverage at affordable premiums. Additionally, you can discover budget-friendly coverage options that fulfil diverse requirements.

Conclusion

In the journey towards financial security, the term insurance calculator stands as a trusty companion, guiding individuals towards clarity and confidence in their insurance decisions. By harnessing the power of technology, individuals can effortlessly navigate the complexities of term insurance, ensuring that their loved ones are safeguarded against life's uncertainties. So, embrace the term insurance calculator today and pave the way towards a brighter, more secure future for you and your family.

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Frequently asked questions

How do you calculate term insurance premium and coverage?
Term insurance premiums and coverage are determined based on various factors such as age, sum assured amount, policy term, lifestyle habits, and health condition. Insurance companies use actuarial tables and algorithms to assess these factors and calculate premiums. Coverage is typically determined by the sum assured amount chosen by the policyholder, which represents the payout to beneficiaries in case of the insured individual's demise during the policy term.
What is a 1 crore term insurance plan?
A 1 crore term insurance plan is a type of term life insurance policy that offers a sum assured amount of Rs. 1 crore. It provides financial protection to the policyholder's beneficiaries in the event of the policyholder's death during the policy term, ensuring that their loved ones are financially secure.
What is the ideal term insurance coverage amount?
The ideal term insurance coverage amount varies depending on individual circumstances such as income, lifestyle, financial obligations, and future financial goals. However, experts often recommend a coverage amount that is at least 10-15 times the policyholder's annual income to ensure comprehensive financial protection for their family.
What is a 20-year term insurance plan?

A 20-year term insurance plan is a type of term life insurance policy with a fixed policy term of 20 years. During this period, the insured individual pays premiums to the insurance company, and in the event of their demise within the policy term, the beneficiaries receive the sum assured amount specified in the policy. It provides financial security for a specific duration, making it suitable for individuals with short to medium-term financial obligations or dependents.

What is the formula to calculate term insurance?

The formula to calculate term insurance typically considers age, income, outstanding debts, and future financial goals. A common method is the Human Life Value (HLV) approach, which calculates coverage as 10-15 times your annual income, adjusted for inflation and liabilities.

How do I decide a term insurance amount?

Decide a term insurance amount by evaluating your annual income, outstanding debts, future financial goals, and family’s living expenses. Using a term insurance calculator can help assess these factors and provide a personalized coverage recommendation to ensure sufficient financial protection.

What is a 10-year term insurance plan?

A 10-year term insurance plan offers coverage for a fixed period of 10 years. If the policyholder passes away during this term, the beneficiaries receive the sum assured. This plan is suitable for short-term financial needs and provides affordable premiums for temporary coverage.

Who can apply for a term insurance plan?

Individuals aged between 18 and 65 years, with a stable income source, are eligible for a term insurance plan. Insurers may also assess factors like health, occupation, and lifestyle before approval.

What portion of the term insurance premium qualifies for tax exemption?

Premiums paid for term insurance are tax-deductible under Section 80C of the Income Tax Act, up to ₹1.5 lakh annually. Additionally, the death benefit received is tax-free under Section 10(10D).

At what age should you buy a term insurance plan?

The ideal time to purchase term insurance is in your 20s or early 30s when premiums are lower. Buying early ensures maximum coverage at an affordable cost, securing your financial future.

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Disclaimer

*T&C Apply - Bajaj Finance Limited (‘BFL’) is a registered corporate agent of third party insurance products of Bajaj Allianz Life Insurance Company Limited, HDFC Life Insurance Company Limited, Future Generali Life Insurance Company Limited, Life Insurance Corporation of India (LIC), Bajaj Allianz General Insurance Company Limited, SBI General Insurance Company Limited, ACKO General Insurance Company Limited, HDFC ERGO General Insurance Company, TATA AIG General Insurance Company Limited, ICICI Lombard General Insurance Company Limited, New India Assurance Limited, Chola MS General Insurance Company Limited, Zurich Kotak General Insurance Company Limited , Star Health & Allied  Insurance Company Limited, Care Health Insurance Company Limited,  Niva Bupa Health Insurance Company Limited, Aditya Birla Health Insurance Company Limited and Manipal Cigna Health Insurance Company Limited under the IRDAI composite CA registration number CA0101. Please note that, BFL does not underwrite the risk or act as an insurer. Your purchase of an insurance product is purely on a voluntary basis after your exercise of an independent due diligence on the suitability, viability of any insurance product. Any decision to purchase insurance product is solely at your own risk and responsibility and BFL shall not be liable for any loss or damage that any person may suffer, whether directly or indirectly. Please refer insurer's website for Policy Wordings. For more details on risk factors, terms and conditions and exclusions please read the product sales brochure carefully before concluding a sale. Tax benefits applicable if any, will be as per the prevailing tax laws. Tax laws are subject to change. BFL does NOT provide Tax/Investment advisory services.  Please consult your advisors before proceeding to purchase an insurance product. Visitors are hereby informed that their information submitted on the website may also be shared with insurers. BFL is also a distributor of other third-party products from Assistance Services providers such as CPP Assistance Services Pvt. Ltd., Bajaj Finserv Health Ltd. etc. All product information such as premium, benefits, exclusions, sum insured, value added services, etc. are authentic and solely based on the information received from the respective insurance company or the respective Assistance service provider company.

Note – While we have made all efforts and taken utmost care in gathering precise information about the products, features, benefits, etc. However, BFL cannot be held liable for any direct or indirect damage/loss. We request our customers to conduct their research about these products and refer to the respective product’s sales brochures before concluding their sale.