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Term Insurance Premium Calculator

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?

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

What is Term Insurance?

Term Insurance plans are the traditional typical insurance plans that are affordable for the policyholder and provide financial stability and complete protection to the loved ones of the policyholder and provide cover against any type of unforeseen events. Term insurance, a type of life insurance, provides coverage for a certain period of time or years. If the insured dies over the policy tenure a death benefit (or sum assured) is paid out. No payout is made if the insured survives the tenure.

The purpose of taking life insurance is to provide life cover to the policyholder and financial security to his family.

There are two ways the individual can take life insurance:

  • By opting for a pure life cover, also known as term insurance
  • By taking life cover with a savings component built-in also called endowment insurance

Why Term Insurance Is Better

Term plans provide pure life cover. This means there is no savings / profits component. They are basic plans which make life insurance more affordable vis-à-vis other options. It is possible for the policyholder to opt for a larger life cover at a lower premium when compared to a similar endowment plan.

The premium in the term plan could vary from one company to another and as the tenure of your policy increases, the premium for the same sum assured increases. The eligibility criterion for term insurance plan varies according to the insurers, the minimum age of entry is 18 years and the maximum age limit is 65 years.

The premiums for Term insurance policies are the lowest among all the types of life insurance policies. The premiums are low since there is no investment component and the entire premium goes for covering the risk. So if the policy holder expires during the insured term, the death benefit is paid to the nominee. There is no survival or maturity benefit once the policy term expires. There may be some plans that offer to return the premiums paid by the policy holder if he survives.

Benefits of a Term Insurance Plan

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 up to 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, up to Rs.1, 50,000 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.

Choose the Right Term Plan?

Well there is no doubt in saying that a term insurance plan refers to be the best financial tool for making a great investment. It will always be there to protect your family from each and every unwanted happenings of the future. This plan provides high coverage at a lower price. Just to get the most of your term plan, you should keep the following steps in mind while buying the same:

Determine a sufficient sum assured

The most important step that you should keep in mind while buying a term insurance plan is the right coverage amount. We all know that we can’t predict future, so just to secure the future of loved ones, it is good to invest money in term insurance. You must keep in the mind that the plan and the sum assured that you decide for your family should be sufficient to meet their future expenses that includes the basic and other liabilities of dependents.

Choose the policy’s tenure wisely

Most of the companies allows you to choose the policy tenure from their fixed options that would be of 15, 20 25 or 30 years. It is very important to choose the right tenure of your term insurance policy and many of things and benefits are associated with the same. While choosing the same, just make sure that you are choosing the right plan that can offer the required coverage for a long period at-least till your retirement. You should buy a cover that can provide the cover till 65 years of age, as nowadays people are marrying late so their responsibilities do not complete at the age of 60. That’s why invest smartly and reap higher benefits.

Compare and Buy

Well when it comes to buy a term plan, several things are associated with the same so choosing the best is the topmost priority. There are many insurance companies in India that deals in term insurance of various forms that can easily go well with the different needs of customers. Well among all the available options, it will be quite difficult to choose the best that’s why you should compare quotes while buying the same online. It will help you in saving a lot of time and money as well.

Inflation Factor

You must consider the inflation factor while purchasing an effective term insurance plan. A term insurance plan that seems enough for today might not be able to meet the expenses after 20 years when actually you may need it and the reason behind the same is the growing inflation rate every year. There are many companies that introduce plans which enhance your covers year by year with a rate of 5-10 percent. But the premium of the same would be higher as compared to other plans, that’s why just keep the inflation factor in mind while buying a term insurance plan.

Last updated on 14-09-2020