What is a Life Insurance Premium Calculator?
A life insurance premium calculator is a very handy online tool that helps you calculate the premium for a life insurance plan and helps you compare and choose a life insurance quote. This online tool helps to calculate life insurance premiums instantly by considering variables such as age, gender, cover-up, life cover, and mentioning personal habits like consumption of tobacco/alcohol.
Benefits of Life Insurance Premium Calculator
InsuranceDekho life insurance premium calculator is an easy-to-use tool that helps a potential buyer make an informed decision for his/her life insurance. Following are detailed benefits of InsuranceDekho Life Insurance Premium Calculator:
- The tool helps you to opt for the highest possible life cover amount that suits your budget and you can also opt for additional benefits at the best possible rate of premium offered by the insurance companies.
- Using life insurance this online tool you can instantly calculate the premium. It helps in saving time.
- Life insurance premium calculator offers the flexibility to make decisions without the influence of an agent that generally affects your choice. It helps in making better decisions in terms of choosing a plan that best suits you.
How is Life Insurance Premium Calculated?
You can easily calculate premiums for a life insurance policy with the help of the InsuranceDekho Life Insurance Premium Calculator. The premium of the life insurance plan depends on the sum assured and other factors such as age, gender, cover-up, riders, and personal habits like consumption of tobacco/alcohol. The premiums are determined by the insurance providers and differ from policyholder to policyholder. The calculation of premium can vary depending on the change in the variables and premium payment frequency.
How to Use a Life Insurance Premium Calculator?
There are many insurance companies competing with each other and each one of them has a different procedure of calculating the life insurance premium. At InsuranceDekho, you need to provide the following information in order to calculate the premium for your life insurance plan:
- Enter your Age
- Select the amount of sum assured
- Select your Gender
- Select ‘Yes’ or ‘No’ to confirm your consumption of tobacco/alcohol
- After this, you will get the premiums for the quotes of your life insurance plans.
Factors Affecting Life Insurance Premium
The premium of life insurance is calculated after considering the following factors:
1. Age: Age is an important element considered to calculate the premium for a life insurance plan. The reason behind age being an important variable in the premium calculation of a life insurance plan is that younger people are less likely to catch diseases and are considered in a low-risk category. Usually, premiums for life insurance are lower when you purchase it at a young age rather than at an age where high risk is involved and premiums are also higher.
2. Gender: Some insurance providers offer less amount of premiums for women. There is scientific and statistical evidence that reveals that women are likely to live more than the average age of a man. This allows women to take advantage of life insurance plans for a longer policy tenure which calls for lower premiums.
3. Medical Records: When you are purchasing a life insurance plan it is necessary to go through medical examinations. These medical examinations help in determining your current health status and help in determining any potential diseases that might occur in the future. Obtaining the results from the medical examination helps in calculating premiums for life insurance plans.
4. Personal Habits: Personal habits like consumption of tobacco/alcohol can affect the calculation of premiums for a life insurance policy. Consumption of tobacco and alcohol is considered harmful to an individual's health. People who consume tobacco/alcohol are more likely to catch different diseases and are considered in a high-risk category. Therefore, the premium rates for non-tobacco/alcohol consumers are low and rather high for people who consume tobacco/alcohol.
Tips to Reduce Life Insurance Premium
Here are some tips which can help you reduce the life insurance premium:
1. Buy Policy Online: Premiums for life insurance plans purchased online are comparatively less than purchasing them offline as it requires no additional cost of purchasing them directly from the insurance company or any agents.
2. Avoid Consumption of Tobacco/Alcohol: Consumption of tobacco/alcohol are harmful to a human being’s body. Health is considered the most important factor while calculating the premium for a life insurance plan. The premium rates for non-tobacco/alcohol consumers are low and rather high for people who consume tobacco/alcohol.
3. Choose the Best Possible Policy Term: The time period of the whole policy tenure also plays an important role in the calculation of policy premiums. If you purchase a policy for a longer-term then the premium for the life insurance will be low as compared to premiums for a short policy tenure.
4. Add Riders Only If Required: When you purchase life insurance you get an option to purchase additional coverage with a life insurance plan. Choose the riders wisely and opt for them only if you genuinely require them because riders increase the number of premiums.
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FAQ About What is a Life Insurance Premium Calculator?
How to calculate life insurance premium?
You can calculate life insurance premium by taking into consideration several factors such as age, gender, occupation, lifestyle, policy tenure, total income, and current monthly expenses and liabilities. It is recommended to choose a life cover of at least 10-20 times your annual income. You can use a life insurance premium calculator to quickly calculate the premium of a particular life insurance policy that you wish to buy.
How are life insurance premium calculators beneficial?
Following are the benefits of using a life insurance premium calculator:
- Simplifies the process of purchasing plans online
- Helps you in managing finances easily by telling you a tentative premium amount
- Lets you compare different life insurance policies in a hassle-free way
- Lets you know the variation in premium with different factors.
How much cover do I need?
One of the main objectives of buying a life insurance policy is to offer financial support to your family and dependents (if any), in case of a misfortunate event of your death. Therefore, the amount of coverage that you choose when buying a life insurance policy, should be adequate for your family members after you, to maintain the standard of living that you have been providing them. When calculating life insurance cover, you must consider the following factors:
- Your annual income
- Your current and future financial liabilities
- Your financial goals
- Number of dependent family members and their expenses
- Your age at the time of policy purchase and the number of years that you will be working for more.
How does a life insurance premium calculator work?
InsuranceDekho's life insurance premium calculator is based on a pre-built algorithm defined for several parameters like type of policy chosen, your age, riders, and policy term. When using this free online tool, you are required to enter details related to these factors and you will get an estimate of the premium of a specific life insurance policy.
Can I add riders to my life insurance policy when buying it online at InsuranceDekho?
Yes. You can add riders to your life insurance policy, in case it offers the same. You will see the rider options when using the premium calculator and can opt for the one you want to buy, by paying an extra premium.