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Term Plan calculator

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What is a Term Insurance Calculator?

What is a Term Insurance Calculator?

Term insurance is the most affordable type of life insurance. When you purchase a term plan, you will be required to pay a premium to the insurance provider in exchange for the life cover they offer. This premium varies from one term insurance plan to another. And of course, it varies from one life insurance provider to the next. So, how do you assess or determine the premium you will be required to pay and make an informed decision about which term plan to purchase? Here is where a term insurance premium calculator comes to your rescue.

A term insurance calculator is a tool that is developed to compute and help you understand the estimated amount premium that you will need to pay for your term insurance plan. You can make use of a term plan calculator free of charge online and get a better idea of the premium you will need to pay in order to receive the sum assured you require from your term plan. By understanding the amount of premium you will need to pay, you can plan your life insurance cover better. You can also use a term insurance premium calculator to check whether the term plan you are considering is within your financial budget. Conversely, you can also verify if the budget you have set aside for this investment is sufficient to give you and your family the extent of the life cover you seek.

Term plan calculators are not only available freely to users online, but they are also quite easy to use. Even if you are a newbie or a beginner who has never used a term insurance calculator before, you can easily make use of this online tool to understand your alternatives better. Given this range of functionalities, it is always a good idea to make use of a term insurance premium calculator before you actually go ahead and purchase a term plan. That way, you can plan your finances and set aside enough money for term insurance premium payments, so your nominees have a sufficiently strong financial safety net in the event of your unfortunate demise that may occur.

Benefits of term insurance calculator

Before you make any purchase, you can probably do a thorough bit of research on the options available to you, isn’t it? Likewise, it makes sense to thoroughly study your alternatives before you buy term insurance. A term plan calculator is one of the key tools that can aid to your research. Using a term plan premium calculator offers you a host of benefits, right from saving time to making comparison easier through just few clicks.

Let us take a look at the many benefits of a term plan calculator.

It makes budgeting easier

It makes budgeting easier

With numerous insurance providers offering term insurance plans, it can become tough to get a good idea of how much premium you will need to pay for your term insurance plan. With a term plan premium calculator, however, you can get a fair assessment of the amount of premium you will need to pay for the extent of cover that you seek. This, in turn, makes it easier for you to have an idea, plan your financial budget, and set aside the term insurance premium amount you would need on a monthly or annual basis depending on your risk appetite.

It helps you get a better idea of the cover you need

It helps you get a better idea of the cover you need

A term plan calculator also comes in handy if you already have a budget in place. You can figure out the kind of life cover that such a budget can get you. In case it is sufficient to get your family through the tough financial situation following your unfortunate demise, you can go ahead and purchase a term plan with that amount of life cover. However, if the cover is inadequate, you can extend your premium budget accordingly, so your family can stay on track and meet their life goals no matter what.

How is your term insurance premium calculated?

Once you have entered all the relevant information, the online term insurance calculator will give you an estimate of the life cover that you need, based on the parameters you submitted.

  1. 1

    To truly understand the genius behind an online term plan calculator, you need to know how the tool calculates your term insurance premium. To begin with, a term insurance premium calculator requires you to input some pieces of information. Typically, you will need to feed in your age, your gender, your date of birth, the variant of the term insurance plan that you intend to purchase, the policy term and the sum assured needed. In addition to this, you also need to provide details regarding your lifestyle, such as whether or not you are a smoker, among other things.

  2. 2

    Depending on the variant of the term plan you choose, you can decide to pay your term insurance premium on a monthly, half-yearly, quarterly or yearly basis. You will also need to give this information before using a term policy calculator. Once you have entered all the details required by the online term plan calculator, the tool calculates the level of premium that you will be charged for the plan you chose. The parameters you fed in influence the level of term insurance premium.

  3. 3

    When you change the factors used for the calculation, you will notice that the term insurance premium also changes accordingly. For instance, changing your age influences the premium charged – the higher the age, the more the premium. Similarly, other factors also affect the term insurance premium, as we will see in detail below.

Factors that affect Term Insurance premium

Calculating term insurance premium is a meticulous process that depends on many input parameters. As we have seen above, you will be required to fill in these metrics when you use a term policy premium calculator. What are these factors, though? Let us get into those details, which are tabulated below.

Your age

Your Age

Age is one of the key parameters that term life insurance premium calculators use to compute the premium chargeable for a plan. The lower the age of the applicant, the lower the premium is likely to be. This is simply because the likelihood of the insurable event, which is the death of the insured, is more likely to happen as the age of the applicant increases.

Your gender

Your Gender

Research suggests that women tend to live longer than men do. Also, heart attacks are twice more common in men than in women. [1] Given these facts, some insurers also take the gender of the insured person into account while calculating the term insurance premium and charge lower premiums for women. This is because the probability of women living longer is higher.

Your medical history

Your Medical history

In many cases, you will also be required to give information of your medical history when you purchase a term plan. Any record of a critical illness in your personal history, or any family history of diseases like diabetes, cancer or Alzheimer’s Disease can trigger higher term insurance premium charges. Critical illnesses and family history of any hereditary diseases increase the chances the insured event happening, leading the nominees to raise a claim. Therefore, such people are charged higher premiums.

Your lifestyle

Your Lifestyle

Some term policy premium calculators also ask you to fill in the details of your lifestyle, such as whether or not you are a smoker, and whether you consume alcohol. People with poor lifestyle habits are generally charged a higher term insurance premium than people of the same age and gender who have better lifestyle habits. This is because insurers need to protect themselves from the possibility of the insured event occurring, which is higher in the case of people with poor lifestyle practices.

Your occupation

Your Occupation

Some term life insurance premium calculators also ask for your occupation when you are calculating the premium charges. This is done because some occupations inherently come with a higher risk than others do. For instance, pilots, firefighters, miners and stuntmen are all engaged in high-risk occupations. So, insurers tend to charge a higher term insurance premium for people in such jobs. On the other hand, people in low-risk jobs like teachers, dieticians or analysts are often charged lower premiums.

The estimated sum assured

The Estimated Sum Assured

The sum assured is another important metric that you need to enter in the term policy premium calculator. The sum assured is the guaranteed amount that is paid to the nominees of a term plan in case the insured person passes away during the term of the policy. It is also known as the coverage or the life cover offered by a term plan. And it goes without saying that the higher the sum assured you opt for, the higher the premium charged by the insurer will be.

The tenure of the policy chosen

The Tenure Of The Policy Chosen

The basic formula to calculate the term insurance coverage will depend on the age and annual income of person. The amount you should be insured for should be enough to cover your family's needs in your absence and for as long as they would need the financial support. With these parameters in place, you can have that peace of mind that your family will be able to go on to achieving their life goals even if you are not there to provide for them.

The premium payment term

The Premium Payment Term

Some term insurance plans require you to pay the premiums throughout the tenure of the policy. Others come with the option of paying premium over a limited period of time alone. The former generally means lower premium payments, while the latter may mean higher premiums for the policyholder. Similarly, single premium plans may also require the policyholder to pay a higher one-time term insurance premium.

The frequency of premium payment

The Frequency Of Premium Payment

Term insurance plans come with different premium payment frequencies. Depending on the terms of each policy, you can choose from options like monthly, quarterly, half-yearly or annual payment frequencies. This choice also influences the term insurance premium, which is generally lower for half-yearly or annual frequencies. On the other hand, premiums paid quarterly or monthly may be higher.

How to use Bajaj Allianz Life's Term Insurance Calculator

Using an online term insurance calculator is quick, easy and simple enough to understand. However, to understand the amount of premium you need to pay, you first need to know how much of a life cover you will require to secure the future of your family. And Bajaj Allianz Life’s term insurance calculator comes in handy. Here is a step-by-step breakdown of how you can use the Bajaj Allianz Life’s term insurance calculator to calculate the details of the cover you need from your term insurance plans.

  • Step 1 Input your annual income

    Your annual income shows your earning capacity. This metric determines how much you and your family need to sustain yourselves and meet your life goals. Therefore, the online term insurance calculator considers this factor. You can use the slider to indicate the amount, or you can enter your annual income manually in the box besides the slider.

  • Step 2 Enter the number of years you’re planning to work

    This field takes into account the extent of working life you have ahead of you. A longer period naturally means you will make more money over the course of those years. However, if you are closer to retirement, you may not have many years ahead of you to keep earning a regular income. It is important to input this detail accurately, so the online term insurance calculator calculates the life cover you need correctly.

  • Step 3 Account for the income you spend on yourself

    Accounting for personal expenses is the next step that you will encounter in the online term insurance calculator from Bajaj Allianz Life. This is the percentage of your income that you spend on yourself, for your personal requirements. You can submit this detail by simply dragging the slider across to the relevant percentage.

  • Step 4 Input the estimated annual increase in income

    Year after year, your income is likely to grow by a specific percentage depending on factors like industry you work in and the position you hold. In all likelihood, you will have a fair idea of this estimate. That is just what you need to feed into the online term insurance calculator here. A word of caution: it is always better to take a conservative estimate when you are making projections like this.

Once you have entered all the relevant information, the online term insurance calculator will give you an estimate of the life cover that you need, based on the parameters you submitted.

Term insurance premium payment options

Once you have decided on the term insurance plan you wish to purchase, you need to keep in mind that it is important to pay your premiums on time. Otherwise, after the expiry of grace period, your policy will lapse. In this regard, it helps to know the different options you have to pay your term insurance premium. Life insurers give you a variety of premium paying options through online as well as offline channels.

Online

Some of the online channels that you can use to pay your premium include

  • Internet banking portals
  • The insurer’s mobile application or customer portal
  • Insurers Website
  • Credit or debit cards

Offline

You can also pay your term insurance premium offline through channels like

  • ECS payments
  • Cash or cheque payments at the insurer’s branches

Others

Clearly, there are many options available for policyholders to pay premiums to their insurance providers. In addition to this flexibility, policyholders can also, to a certain extent, choose the frequency of premium payments. Many online term insurance premium calculators even ask you to input this information. Depending on the variant of the term insurance plan you choose, you can pick from different premium payment frequencies such as

  • Monthly payments
  • Quarterly payments
  • Half-yearly payments
  • Annual payments

Some term insurance plans also come with the single premium payment option, wherein you only need to make a lump sum payment of the term insurance premium at the time of purchase depending on the terms and conditions of the policy chosen.

Term insurance plans by Bajaj Allianz Life

Before you go ahead and sign the dotted line for purchasing term insurance plans, you need to first be clear about "what is term insurance?" In simple words, a term insurance plan is the purest form of life insurance. In the unfortunate event of the death of the policyholder, their nominee receives a death benefit either as a lump sum amount or in instalments as per the option selected and terms and conditions mentioned under the policy. This enables the surviving members of the family to continue maintaining their lifestyle and meet their life goals in case there is a sudden demise of the policyholder.

Bajaj Allianz Life offers a wide range of both offline and online term plans.

Bajaj Allianz Life Smart Protect Goal

Bajaj Allianz Life Smart Protect Goal

A non-linked, non-participating, pure life term insurance plan

Bajaj Allianz Life  eTouch Online Term

Bajaj Allianz Life eTouch Online Term

A non-linked, non-participating, pure term life insurance plan

Bajaj Allianz iSecure

Bajaj Allianz iSecure

A non-linked non-participating term life insurance plan

Bajaj Allianz Life Smart Protect Goal

Bajaj Allianz Life Smart Protect Goal

A non-linked, non-participating, pure life term insurance plan

Bajaj Allianz LifeSaral Jeevan Bima

Bajaj Allianz LifeSaral Jeevan Bima

A Non Linked, Non-Participating, Individual Pure risk premium Life Insurance Plan

Bajaj Allianz Life eTouch Online Term

Bajaj Allianz Life eTouch Online Term

A non-linked, non-participating, pure term life insurance plan

Bajaj Allianz iSecure

Bajaj Allianz iSecure

A non-linked non-participating term life insurance plan

Bajaj Allianz iSecure More

Bajaj Allianz iSecure More

 A non-linked non-participating increasing cover term life insurance plan

Bajaj Allianz iSecure Loan

Bajaj Allianz iSecure Loan

A non-linked non-participating mortgage cover term life insurance plan

Bajaj Allianz Life Secure

Bajaj Allianz Life Secure

A non-linked, non-participating whole life term plan

Bajaj Allianz LifeStyle Secure

Bajaj Allianz LifeStyle Secure

A non-linked, non-participating, term life insurance plan

Online Term Insurance Calculator: Frequently Asked Questions (FAQs)

  • What is term insurance?

    Term insurance is a kind of life insurance that offers a pure life cover. When a person purchases a term insurance plan, it ensures that in the event of their unfortunate demise, their nominees receive death benefits either as a lump sum payout or as periodic payments in instalments. This enables the beneficiaries to continue to meet their life goals as planned, even when they have lost their primary or only source of income due to the policyholder’s demise.

  • How much term insurance coverage do I need?

    One of the biggest dilemmas that people planning to buy term life insurance face is deciding the extent of coverage they need. If you are unsure about this too, it helps to know what experts recommend. Ideally, it is a good idea to opt for a term insurance cover that is around 15 to 20 times your annual income. [2] That way, your family can live a comfortable life and continue to pursue their life goals over the long term even in your absence.

  • What personal information do I need to enter in a term insurance calculator?

    Before you go ahead and purchase a term policy, it helps to use a term insurance calculator to understand the details of the cover and the premium better. The exact details that you need to enter vary from one calculator to another. Broadly speaking, however, you will be required to fill in details like your age, gender, annual income, number of working years ahead, and the expected growth in income year on year, among others.

  • Is a term insurance calculator safe to use?

    A term insurance calculator is a convenient online tool that helps you calculate the estimated premium you will need to pay or the cover you need to protect your family’s future. Using a term insurance calculator is extremely safe, since all the information you enter is secure and is not shared with any third-party recipients. You can be rest assured that there is no danger associated with using a term insurance calculator online.

  • Should I buy a term insurance plan even if I have a company cover?

    Yes, it is always advisable to purchase your own individual term life insurance plan even if you have a company cover. There are many reasons for this. Firstly, the cover provided by your company may not always be adequate to get your family through the tough times following your unfortunate demise. Secondly, company covers cannot be customized for your individual requirements. In addition, you run the risk of losing that cover when you quit that job or retire.

     

  • How is term insurance premium calculated?

    Term insurance premium depends on many factors. To calculate the premium chargeable for term insurance policies, insurers take into account many metrics like your age, your gender and your lifestyle habits. In addition to this, your medical history and the nature of your job also play a key role in calculating the term insurance premium. Moreover, factors like the sum assured, the tenure of the policy, the premium payment term and the premium payment frequency are considered.

  • What factors affect term insurance premium?

    Term insurance premium is not a standalone factor. It is determined by a host of other factors that influence the level of premium chargeable for a policyholder. Age is one of the key factors affecting premium. Gender, occupation, lifestyle and medical history are other factors. Additionally, many metrics related to the policy itself impact the premium. This includes the extent of life cover provided, the tenure of the policy, the term over which the premium is charged, and the frequency of premium payments.

  • Will term insurance premium amount change if I opt for additional riders?

    Many term insurance policies offer the policyholder the option to choose additional riders. Some examples of riders include accidental death benefit, critical illness cover, waiver of premium, accidental permanent total or partial disability rider and family income benefit rider. Since these riders essentially offer added benefits to the policyholder, the premium charged for term life insurance that comes with riders will be higher.

  • How reliable are online term insurance premium calculator estimates?

    Online term insurance calculators are convenient tech-based tools that help people get a better idea of the kind of cover they need and the amount of premium they will be charged for such a cover. Most such calculators take into account a variety of parameters like age, gender, sum assured, policy term, annual income, expected increase in annual income and so on. Since these calculators consider such a wide range of parameters, the estimates they offer are highly reliable.

  • How do I pay term insurance premiums?

    In order to keep your life cover active, you will need to pay the premiums for your term insurance regularly and on time. You can pay your term insurance premium through a variety of offline and online modes. Offline channels include ECS payments, and cash or cheque payments at any of the branches of your insurer. Online modes include net banking, credit or debit cards and mobile apps. You will need to check with your insurer to see which of these modes they support.

Term Calculator - Life Insurance Guide

5 Important Features Of A Term Policy

In today’s world, life insurance is of utmost importance, regardless of one’s age. Life insurance not only provides insurance coverage to the insured, thereby offering financial assistance to their family members and nominees in case of an unforeseen event, but it also provides several tax benefits. Furthermore, according to a recent UN report, India also has the world’s largest youth population, and this shift in culture and impetus on financial prudence is expected to drive positive change in the insurance industry [1].

Read More

Online Term Policy - What Is It And How To Buy One

We dread the painstaking process of purchasing term policies. The lengthy process is cumbersome as well as time-consuming. However, the development in E-commerce has made the procedure simpler. The insurance companies have made available online term policies. Opting for an online term plan solves many of the complexities due to its easy access.

Read More

Term Insurance Benefits You Should Know About

Safety is an important consideration for all of us. For instance, when we are driving, we make sure that we have our seatbelts on for our safety. Naturally, we extend this care and consideration to every sphere of life and are even more cautious when it comes to our family.

Read More

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Last Updated By Bajaj Allianz Life on

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05/Feb/2021

The findings generated from the above calculator is completely and solely based on the information shared by you with respect to questions being asked and has no linkage with any offer/benefits/outcomes associated with our Products. Bajaj Allianz Life will not be responsible for any kind of repercussions on any decisions made by you basis the use of this calculator. For the purpose of calculation, it is assumed that the payments are made in advance i.e beginning of the month and an interest rate of 7% per annum is used to derive the present value of future stream of incomes.

[1]https://www.health.harvard.edu/heart-health/throughout-life-heart-attacks-are-twice-as-common-in-men-than-women

[2] https://www.dnaindia.com/personal-finance/report-personal-insurance-term-policy-should-be-15-20-times-your-annual-income-2762424#:~:text=Some%20experts%20believe%20that%20a,crore%20to%20Rs%202%20crore.