What is Term Insurance Premium Calculator?
A term insurance premium calculator is a freely available online tool that helps calculate the amount of premium that you need to pay for the desired insurance coverage and policy benefits. A term insurance premium calculator takes into consideration various factors such as our age, current income, debts, marital status, health conditions and the number of dependents to help you choose an insurance plan that best fit your needs and life goals.
What Does A Term Plan Calculator Do for You?
Essentially, a term insurance calculator helps you get an estimate of the insurance coverage that you would need to protect your loved ones financially and the premium payable. Ideally, the life insurance coverage should be large enough to secure your family’s financial needs in case of an eventuality.
On the other hand, the premium payable for the insurance coverage chosen should fall within your monthly budget.
A term insurance premium calculator provides the required premium amount payable for the selected insurance coverage amount, based on the following factors:
Life Cover Amount - Life cover amount is the amount insurance company will pay your family or nominee in case your demise occurs within the policy period. The recommended life cover amount to opt for should be at least 10times your annual income.
Policy Term - The policy term is the period for which the insurance plan provides you cover. In case of your unfortunate demise within this period, your family or nominee would receive the life cover amount.
Flexibility to Choose Add-ons - Riders are an add-on that you can choose while purchasing the term insurance policy by paying an additional premium. These riders help provide benefits such as additional financial coverage over and above the life cover amount.
Following rider options are available with Max Life Smart Term plan:
Critical illness benefit option Upon diagnosis of any of the 40 specified critical illnesses including cancer and cardiovascular diseases, the benefit amount is paid as a one-time lump sum.
Future Waiver of Premium–Max Life Waiver of Premium Plus Rider (UIN: 104B029V03)
In case you are unable to continue paying the premium due to loss of income (because of accidental injury or life-threatening ailments), the insurance company will waive off any future premiums payable while the policy benefits continue as intended.
Accidental Cover - Max Life Comprehensive Accident Death Benefit Rider (UIN: 104B025V03)
The rider provides additional coverage to compensate for the loss of income due to temporary/permanent disability or death due to an accident.
How to Use the Term Insurance Premium Calculator?
Step 1: To use the term insurance premium calculator, you need to provide the following details:
· Date of Birth
· Annual income
· Mobile number
· E-mail ID
· Lifestyle choices such as whether you are a smoker/non-smoker
Step 2: Select the following values:
· Life cover amount
· Policy tenure
· Duration of premium payment
· Premium payment mode (there are four premium payment modes – Annual, Half Yearly, Quarterly, and Monthly)
Step 3: Choose between the following rider add-ons (on payment of the additional premium)
· Accelerated Critical Illness (ACI) Benefit
· Future Waiver of Premium
· Accidental Cover
Benefits of Using A Term Insurance Premium Calculator
Choose the Right Amount of Cover
A term insurance premium calculator gives you an estimate of the life cover amount that helps cover your liabilities and your family’s financial needs, and the premium payable under the insurance policy. The choice of coverage depends upon different factors such as your annual income, existing liabilities, marital status, and the number of dependents and several other factors
Using a term insurance premium plan calculator, you can opt for the highest possible life cover amount that suits your budget. Given the fact that investing in life insurance is a life-long commitment, you do not want to end up purchasing a term insurance plan that offers sub-par financial protection or for which you are unable to sustain the payment of future premiums.
In simple terms, you can opt for the maximum insurance coverage and plan benefits at the best possible rate of premium.
How Does the Term Insurance Calculator Work? (Backend Calculation on Mortality)
Just like any other sector, life insurance, too has its own set of terms that you need to understand. One such term is the Mortality Charge. When you purchase a life insurance plan, the insurance company levies a charge to cover the expenses for providing insurance protection upon death.
This levied charge is known as the mortality charge. The estimation of mortality charges is done as per the Standard Annual Mortality Charges 1 table, which, in turn, is based on the historical data on life expectancy in India. On the other hand, the mortality rate is defined as an insurer’s anticipation of the number of deaths occurring amongst a group of insured individuals, for a certain age.
Typically, mortality rates are considered lower for younger, healthier individuals who do not work in a high-risk job profile. Therefore, the term insurance premium rates vary with age.
Effectiveness of Max Life Term Plans
The primary purpose of life insurance, especially term insurance cover, is to provide all-around financial security to your loved ones, helping them to take care of their lifestyle expenses and goals. In case of your untimely demise within the policy period; therefore, the insurance company settles your claim and provide the insurance coverage amount to your family.
There are; however, several instances where your settlement may get delayed due to reasons such as incomplete paperwork, lack of communication in terms of claim submission, or misrepresenting of claim aspects. Any delays in setting the insurance claim will only add to the emotional turmoil of the grieving family.
Max Life Insurance understands your concerns. To show their commitment towards swift and effective claim settlement; therefore, Max Life Insurance endeavors claim settlements within a day after receiving them, under the InstaClaimTM process.
InstaClaimTM is subject to the following conditions:
· The claim amount on all eligible policies^ should be up to one crore
· The policy should have completed three continuous years
· All the necessary policy documents# must be submitted before 3 PM on a working day
· Claim does not warrant field verification
Herein, a dedicated Claim Settlement Officer will be assigned to your family, who would initiate the claim submission process and handhold your family through the nuances of claim settlement and ensure quick claim processing and disbursal.
What Factors Determine Your Term Plan Premium?
· Geographical location
· Height and Weight
· Lifestyles habits (smoking, tobacco use, alcohol consumption)
· Medical history of you and your family
· Sports and Hobbies · Plan you have opted for
· Period of coverage you have chosen etc.
All these factors and other decisions that you have made in your life can significantly affect the amount of premium you have to pay.
How Does Age Affect Your Premium Calculation?
Your age is the most critical factor that determines your rate of premium. When you apply for term insurance, the rate of premium varies with your age.
For example, a 30-year old male (non-smoker, annual income between 7-10 lakhs) would have to pay a premium of Rs 4,720 (inclusive GST) for a term insurance cover of Rs. 50 lakhs, availing coverage up to the age of 60, while the premium payment term is of 30 years (under Regular Pay option), if he chooses to purchase Max Life Online Term Plan Plus (UIN 104N092V04). **
** A Non-Linked Non-Participating Individual Pure Risk Premium Life Insurance Plan
On the other hand, a 40-year old male (non-smoker, annual income between 7-10 lakhs) will have to pay Rs 7,198 (inclusive GST) for the same term insurance coverage tenure (up to 60 years of age), but his premium payment term will be 20 years, under Max Life Online Term Plan Plus (UIN 104N092V04). **
** A Non-Linked Non-Participating Individual Pure Risk Premium Life Insurance Plan
As evident, the amount of premium payable increases with age, because insurers associate higher age with a higher risk of mortality. Therefore, it is essential that you secure yourself with adequate life insurance coverage early in your life.
What Is the Impact of Premium Calculation on Smokers?
Smoking can increase your chances of developing life-threatening ailments such as lung cancer or throat cancer. Insurance companies; therefore, categorize smokers as high-risk and ask them to pay higher premiums.
If you smoke regularly or have been consuming any tobacco product for 12 months before purchasing term insurance, you will be considered a high-risk asset by the insurance company and will have to pay a higher premium amount than non-smokers.
Why Occupation Impacts Term Insurance Premium Calculation?
Your occupation also plays an integral part in determining your term insurance premium amount. Insurer categorizes some professions as high risk than others, such as defense, aviation, oil, and coal mining. On the other hand, individuals working in offices with a desk job, IT professionals, shop owners, and teachers are a low-risk asset.
Generally, people working in safer environments may pay a lower premium than those working in a high-risk work environment.
Example of other calculators you may want to use
Human Life Value Calculator2
· It calculates the life cover based on your expenses and savings
· You can choose riders to avail additional financial protection, over and above your basic life cover by paying an additional premium
BMI (Body Mass Index) Calculator5
· It calculates your body mass index with the help of your height and weight.
· BMI is a vital factor because the fitter you are your chances of living a healthy life is much higher
Mortality Risk Calculator3
· The mortality risk calculator reflects the effect of your choices on your life, based on your exercise routine, food intake, lifestyles habits, and general health conditions.
· It draws an approximate picture of the risk your life is prone to
· You must fill day to day information of your lifestyle, daily routine, and your family’s health background
· It calculates mortality risk, lower the risk better it is
Retirement Planning Calculator4
· It calculates your current age and your planned retirement age and then asks for your monthly expenses and your savings for life after retirement
· Based on this information, it calculates whether you are covered or not
Source: 1- https://www.actuariesindia.org/subMenu.aspx?id=191&val=Mortality_Table&AspxAutoDetectCookieSupport=1 2- https://www.maxlifeinsurance.com/online-insurance-plans/insurance-calculators/human-life-value-calculator 3- https://www.maxlifeinsurance.com/insurance-calculators/mortality-risk-calculator 4- https://www.maxlifeinsurance.com/power-of-compounding-calculator 5- https://www.maxlifeinsurance.com/insurance-calculators/bmi-calculator
^ InstaClaimTM is available for all versions of Max Life Online Term Plan (UIN 104N078V01) and Max Life Online Term Plan Plus (UIN 104N092V01/ UIN 104N092V02/ UIN 104N092V03/ UIN 104N092V04) and Max Life Smart Term Plan (UIN 104N113V01/ UIN 104N113V02)
#Mandatory Documents: Original policy document, Original / attested copy of death certificate issued by local municipal authority, Death claim application form(Form A), NEFT mandate form attested by bank authorities along with a cancelled cheque or bank account passbook along with nominee’s photo identity proof, Discharge/ Death Summary attested by hospital authorities or FIR & post mortem report /viscera report (in case of accidental death)