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How a Term Plan Calculator can help

Life Insurance

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Life Insurance article in Advisorkhoj - How a Term Plan Calculator can help
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A term plan calculator is a specially designed tool that helps you calculate the required life cover in order to get a desired sum assured for you. This calculator, which helps you to calculate the exact premium for the desired life cover for you, is available on the website of all life insurance companies and comes handy when you are buying a term insurance plan. Remember, in a term plan, life cover is the most important part as this is the amount your nominee gets in case of your sudden death.

Benefits of a term plan calculator

Comparison of various plans in once place

– Insurance Companies usually offer more than one term plan suiting the different needs of the customer. Using the term plan calculator you can compare the various plan features and premiums and select a plan suitable to you. If you visit an insurance comparison website, you can use the term plan calculator even for comparing premiums and plans of various insurance companies in one place.

Time saving and hassle free

– As you are comparing the term plans online; there is no need to submit any document. You get the quote within minutes and take a quick decision whether to buy or not.

Cost effective

– Once you have compared the premiums using the term plan calculator, you can also buy the term plan online. Buying online is cheaper as the premiums are less due to non-involvement of any intermediary.

How to use a term plan calculator

  1. First, you need to enter your personal details like, name, date of birth, gender, income, marital status and your family structure etc.

  2. The next step could be answering your and family health related questionnaire. Apart from this, you may be asked to enter your PAN, Aadhaar and bank details.

  3. The third step could be entering the sum assured you want, period of life cover and the premium paying mode, whether monthly, quarterly, half yearly and annual.

  4. Once you know the premium, you can buy the term plan using your net-banking facility or debit card.

The above is just an example of the steps involved but the same may vary from company to company.

Now that you know the benefit of term plan calculator and how to use it, let us see what the benefits of a term insurance plan are.

Low premium

– If you can use the term plan calculator well, then you can get the highest sum assured or life cover in lieu of a low premium. Though the amount of premium depends on, if you are a smoker, how is your health history, sum assured and tenure of the policy, the premium of term plans are cheaper than other plans as there are no ancillary benefits attached to it. On comparison with the premiums of conventional or traditional plans, it has been found that the term insurance premiums are the cheapest.

Lower tenure

– Term Plans can be taken for shorter tenure also. For example – you have taken a home loan of Rs 75 Lakhs for 15 years. In this case, you can take an additional life cover through a term plan equal to the amount of home loan. This ensures that your family could repay the loan and retain the house in case of your sudden demise.

Longer tenure

– You can take a term plan upto the maximum age of 75 years. With growing life expectancy rate in India, term plans help you in protecting the financial future of your family even when you are quite aged.

Income Tax Benefits

– A tax rebate on the premiums paid for the term plan, upto Rs 150,000 in a FY, can be availed under Section 80C of the Income Tax Act 1961. The maturity benefits paid (in case of term plans with return of premium option) and also the claim amount (if any, received by your nominee) is also tax free under Section 10 (10D) of the income Tax Act 1961.

Term plans are simple product to protect the financial future of your family. Using the term plan calculator, you can compare and buy the right term plan with low premium for a long period of time.

Insurance is the subject matter of the solicitation.

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Priyanka Chakrabarty

A literature enthusiast who loves to write. An ardent social worker who dreams of bringing about change and hopes to do so through her writing. A firm believer of the saying pen is mightier than the sword, Priyanka is an English Honours graduate. She also pursed Diploma in Wealth Management Practice from IIFP and is a certified social media expert.

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