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Jul 25, 2016 531

How is Term Insurance Premium Calculated?

Having a term insurance policy is quite important in order to secure the family’s future. But buying a right policy is quite a tricky job. Nowadays, as the insurance companies offer a wide range of term insurance policies, it is important to have a good understanding of plans before you zero in on the one. Term insurance premium calculator is a great tool to use in order to choose the most economical and best plan for yourself.

This is a specially designed tool that helps you to calculate the required monthly cover in order to get sum assured desired by you. A premium calculator helps you to balance the sum that you would like to save for your family in case of unfortunate demise. With the help of term insurance calculator, you can not only choose the best plan for yourself whereas you can also customize this calculator according to your own convenience.

How to use term insurance premium calculator?

You can use a premium calculator in 3 easy steps and get the desired quotes. These steps include

1. The insured need to enter all the personal details like gender, date of birth, marital status, life coverage, the number of children one has, annual income, etc.

2. Secondly, the policy holder will have to enter the desired sum assured amount and for how many years you want. The insured will also have to clarify whether he/she would like their family to receive money one time as a lump-sum amount or in a monthly income.

3. After clicking the button the calculator will recommend some beneficial term insurance plans with details to you. You can compare the plans and move forward to buy.

By comparing the different policies online, you can save yourself from unwanted expenses of agents and can save ample time. Moreover, the premium calculator helps you to choose the most economical plan that provides all coverages to the insured. Apart from this, the term insurance calculator has many more benefits too.

Saves Time-

The premium calculator helps you to save ample amount of time. In order to get the premium quote, you don’t require to submit any hard copy of your documents. By just filling the details of your document online, the insured can get the apt term insurance plans that suits his needs, in just 2 minutes. Once you have decided on a plan you can immediately buy it online without any interference of agent.

Compare Various Plans-

The term insurance premium calculator offers an option to the insured to compare the various term plans offered by the insurance companies on a single platform.

Cost Effective-

In today’s time, to meet the need of the customers the insurance companies are coming up with more customized plans. Moreover, there are numerous companies that like to deal with their customers online. The insured can get mind blowing discounts while purchasing the policy online. So, with the help of premium calculators, you can save bundles on your income by comparing and choosing the best plan for yourself.

While using the premium calculator it is important to consider the factors that decide the premium rates

1. The age of the applicant

2. The current health history of the term plan buyer

3. Tenure of the policy

4. Intake habit

5. Sum assured

In order to get best out of your plan, the insured should check these important aspects before purchasing it.

1. The most important step that should be taken while purchasing a term plan, is to determine the amount that would be sufficient to cover the needs of your family in case of demise of the policyholder. Therefore, the insured should ensure that the availed coverage is enough to fulfill the basic liability and expenditure of the dependents.

2. In most of the term plans, you can choose your policy tenure according to your desire from the given option of 15, 20, 25 or 30 years. As the policy tenure plays a major role in the execution of financial plan it is very crucial to choose the right policy tenure. One should keep in mind that the plan you are deciding to purchase should cover you till retirement. Keeping the present scenario in mind the insured should choose on the tenure of the policy.

3. Once you decide on the tenure of policy, it is wise to surf online and check the wide options of term plans available in the market. By comparing the various plans online and differentiating the premium rates you can choose the most beneficial plan for yourself. While making a comparison the insurer should check on the claim settlement ration and financial track record of the company. It is always advisable to go for a company that has a highest claim settlement ratio.

4. Do not forget to check the inflation factors while buying a term plan. With the change in liabilities the cover that seems to be sufficient today might not work in future. Beside this, there are many companies that are coming up with plans that automatically enhance your cover yearly by a rate of 5-10%.

By keeping all these aspects in mind, you can make the best use of a premium calculator and choose the most comprehensive plan for yourself. 

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