If you’re one of those individuals who are looking for an answer to the question ‘what is term insurance?’, here's something that can help you understand the concept.
A term insurance policy is a financial tool that can help you secure your family’s financial future even when you’re not around. It is basically a contract between an individual and an insurance provider, where the provider agrees to pay a specific sum of money, known as the sum assured, to the nominee of the individual upon the individual’s demise.
In return, the individual is required to pay sums of money, known as premiums, periodically to the insurance provider. And the premiums that the individual is required to pay is determined by a host of factors, the sum assured benefit being one of the most important. Now that you’ve gotten a fair idea of ‘what term insurance is, how do you go about determining just how much of a sum assured your family would need? Since your family’s life is at stake, you can’t simply take a decision based on assumptions or guesses now, can you?
Here’s where a term insurance calculator can help. Based on your inputs, it allows you to determine just how much life cover you would need. Sounds interesting, right? Let’s take a more in depth look at this unique tool.
What is a term insurance calculator?
As you’ve already briefly seen above, a term insurance calculator is a financial tool that allows you to find out the amount of life cover that you would have to opt for in a term insurance policy. By giving you an estimate of the amount of sum assured that you would need to opt for, the tool allows you to make informed decisions.
The calculator gives you a real-time result of the estimated premiums as soon as you enter your inputs. And above all, term insurance calculators can be found online and are completely free to use too!
How to use a term insurance calculator?
Bajaj Allianz Life offers a term insurance calculator that you can use to get an estimate of the amount of life cover that you will need to keep your family financially secure. Here’s how a term insurance calculator works:
- Firstly, visit the website of Bajaj Allianz Life and navigate to the term insurance calculator page. You can find it under the ‘Tools & Calculators’ section.
- Enter your total annual income in the text box. Alternatively, you can also use the slider.
- Then, enter the number of years that you’re planning to work for in the future.
- Enter the expected percentage of increase in your income that you’re likely to experience.
- And finally, enter the percentage of income that you spend on yourself and not your family.
- As soon as you enter all the fields above, the calculator should provide you with an estimate of the life cover that you should opt for in a term insurance policy.