Navigating Life Insurance: Understanding Benefits of a Term Insurance Calculator - Hindustan Times
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Navigating Life Insurance: Understanding Types, Role and Benefits of a Term Insurance Calculator

Published on Feb 26, 2024 04:40 PM IST

Life Insurance calculators help in choosing the right policy by estimating coverage needs and premium amounts.

Life Insurance
Life Insurance
ByHT Brand Studio

Life Insurance

Life Insurance provides financial protection to the nominee in the unforeseen event of death of the policyholder during the term of the policy. There are different types of Life Insurance plans available but the sum assured or the coverage amount is determined at the time of purchase of the life insurance policy. Generally, insurance companies in India offer policy terms between 5 to 40 years.

Choosing the right Insurance Policy is a big task that needs proper consideration and time. Deciding on the type of policy or life insurance rates is confusing without expert help. This is where term insurance calculators come in and help you choose a policy that is perfect for you.

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What is a Term Insurance Calculator?

A term insurance calculator is a customised tool to help you calculate and finalise the coverage amount as per your requirements. This calculator helps expedite the process of purchasing the right life insurance policy by estimating your coverage needs and then calculating the premium you will pay for your policy. It is extremely simple to use and you just need to provide a few necessary inputs. Once you enter the required information correctly, the calculator will tell you how much coverage you need to adequately protect your family. In the maze of various life insurance policies, term insurance calculator also recommends the best policies for your needs that are available from different insurance providers.

Life Insurance
Life Insurance

Using the Term Insurance Calculator

Term insurance calculators are generally very easy to use and you just need to provide some key information. This includes:

  • Current age of the applicant
  • Type of insurance policy or name of the plan
  • Medical history
  • Occupation
  • Annual income and current savings
  • Term and frequency of premium payments
  • Existing loan details if any
  • Lifestyle factors – smoking behaviours, etc.

Types of Term Insurance Calculators

Different types of term insurance calculators are usually based on the plans given below:

  1. Basic or Level Term Plan

This type of plan has a fixed sum assured which will not change during the term of the policy. The premium for this basic life insurance policy is calculated using a basic term insurance calculator.

  1. Expanding or Increasing Term Plan

Under this plan the sum guaranteed increases by a fixed percentage each year and even if the coverage changes the premium will still remain the same. For these kinds of policies, separate calculators are used that calculate premiums based on the rising coverage levels.

  1. Decreasing Term Plans

This plan is the complete opposite of a growing term plan. With each passing year, the promised sum decreases under this type of policy. Decreasing Term Plan needs a separate calculator to compute the annual set payment. The annual set payment needs to be paid even if the coverage decreases.

  1. Return of Premium Plans

Under this plan, the premiums a policyholder pays are reimbursed when this policy reaches maturity. The premiums are calculated through a premium term insurance calculator as this plan offers greater premiums as compared to other life insurance policies.

Benefits of Life Insurance Calculators

Life Insurance
Life Insurance

Life insurance calculators are of great help when you plan to purchase a Life Insurance Plan. They offer numerous benefits like:

  • Life insurance calculator helps you compare different prices for various plans.
  • The computed premium through this calculator is dynamic and varies depending on your updated coverage specifics.
  • Term insurance calculators help you assess the cost of your chosen policy even before buying it as it gives you an accurate calculation of the due premium.
  • The calculator is basic and extremely simple to use, assisting you in making decisions without any confusion. Moreover, it is free of cost.

Conclusion

Even when you are young and healthy, Life Insurance coverage is essential. Life Insurance Policy is the best way to safeguard your family’s financial future in case you are not around. Life Insurance Policy safeguards your loved ones from severe financial instability in unfortunate times. Life insurance calculators assist you in case you are confused about premiums and help you make the best decision.

Check out ACKO’s Life Insurance Plans for a hassle-free insurance experience.

Disclaimer: This article is a paid publication and does not have journalistic/editorial involvement of Hindustan Times. Hindustan Times does not endorse/subscribe to the content(s) of the article/advertisement and/or view(s) expressed herein. Hindustan Times shall not in any manner, be responsible and/or liable in any manner whatsoever for all that is stated in the article and/or also with regard to the view(s), opinion(s), announcement(s), declaration(s), affirmation(s) etc., stated/featured in the same.

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