How Is The Premium Of Life Insurance Calculated?
Updated On Jun 29, 2022
Table of Contents
A life insurance calculator is an online tool that helps the individual to evaluate the premium rate of the policy. There is an extensive range of life insurance products available in the market. While buying a life insurance plan, an individual needs to pay the premium in return for the life coverage offered by the policy. There are various factors that determine the premium rate of the insurance policy. Thus, with the help of a life insurance premium calculator an individual can calculate the approximate premium rate of the policy.
The life insurance calculator can be used free of cost online in an easy and hassle-free way. Moreover, the insurance buyers can also customize the calculator according to their convenience. Having a proper understanding of the premium amount helps an individual to estimate the coverage amount they require to ensure the financial security of their loved ones. With the help of the life insurance plan premium calculator, the individual can make an easy comparison of different plans and choose the best policy as per their suitability and requirement.
Benefits of Life Insurance Premium Calculator
There are various benefits of using a life insurance premium calculator. Let’s take a look at some of these benefits:
Saves Time
A Life insurance premium calculator is not only easy to use but also saves a lot of time and effort. To get the premium quotes, one does not need to submit any hard documents. By entering a few basic details like annual income, name, date of birth, etc. one can get the premium quotes of various plans in 2 minutes. By making an informed decision an individual can purchase the policy online without any intervention of the agents.
Comparison of Different Plans
With the help of a Life insurance calculator, an individual can compare an extensive range of plans offered by different insurance companies on a single platform. Moreover, they can also check the benefits offered by various plans and choose the best Life insurance plan.
Makes Budgeting Easier
With an array of Life insurance policies available in the market, an individual can find it difficult to have a proper understanding of how much premium they will need to pay to get the desired coverage amount. With the help of a Life insurance premium calculator, an individual can get a fair idea of the amount of premium they will need to pay to get the desired coverage. Thus, it helps an individual to create a strong financial budget accordingly.
Cost-Effective
Life plan premium calculator can be used online free of cost. Moreover, many insurance companies offer exciting discounts to buyers who buy insurance online. The insurance buyers can visit the Paytm mobile app and use the Life insurance calculator to analyze various plans online and zero in on the plan as per their requirements.
Provides a Better Idea of Coverage
With the help of the Life plan calculator, an individual can estimate the life cover they can avail in the given budget. The individual can also analyze whether the life cover chosen is adequate to provide financial protection to the family in case of any eventuality. However, in case the life cover chosen is not adequate then the insurance buyer can increase the premium budget accordingly.
How to Use a Life Insurance Premium Calculator?
By following these simple steps, one can calculate the premium quotes in a jiffy:
Step 1– The individual will need to enter personal information such as gender, date of birth, annual income, marital status, smoking habits, etc.
Step2– Enter the desired sum assured amount. Along with this, the policy buyer will also need to enter the tenure they want the life cover for.
Step3– Enter the estimated annual increase in income. With the increase in age, the annual income of the individual also increases. In order to make the right projection, the individual will need to enter the estimated annual increase in income.
Step4– The Life insurance calculator will display the plans as per the details entered by the policy buyers. The buyer can make a fair comparison of different plans and choose the best plan as per their requirements and suitability.
Conclusion
There are various factors that determine the premium rate of the policy such as age, annual income, gender, occupation, marital status, coverage amount, etc. Make sure to keep these aspects in mind while calculating the premium rate of a Life insurance policy. Also, it is equally important to compare the quotes of various plans online and choose the best Life insurance plan at a lower premium rate.
Also read: Explanation Of Term Insurance Riders
