Things You Should Know About Term Insurance Plans Premium Calculators

Plan your finances in advance using a term insurance premium calculator. Know how it works, what it takes into consideration when setting the premium rate and where you can you use the premium calculator tool.
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What are Term Insurance Plans?

Term insurance plans are life insurance policies which provide cover for a specific period of time, or ‘term’. Typically, a regular term insurance plan will offer a death benefit to the family of the deceased policyholder if the latter dies during the policy term and the policy is active.

What are Premium Calculators?

Premium calculators are useful interactive tools which help users, analyze, compare and plan their insurance coverage by zeroing in on the plan most suitable for their financial requirements. Premium calculators, therefore, help users get an accurate picture of their insurance requirements. Users have to submit specific data to make use of premium calculators. Some of the information required is listed below:

  1. Proposer’s Name

  2. Age

  3. Gender

  4. Date of Birth

  5. Plan Type

  6. Sum Assured

  7. Policy Term

  8. Premium Paying Term

  9. Tax

  10. Total premium payable

  11. Year of purchase of plan

  12. Riders

  13. Any other data depending upon the sub-plans

Features of Premium Calculators

The following are the salient features of premium calculators

Features

Description

Coverage

Premium calculators will help customers determine the exact amount of coverage required to protect their families in case of the unfortunate death of the policyholder

User-friendly

Calculators are simple, easy-to-use financial tools. Users have to fill in the required details to get the information they seek

Analysis

By providing details such as date of birth, and other details related to a term insurance plan, customers can analysis the cost of the plan versus the benefits it offers

Comparison

Customers can enter details related to various term insurance plans and thereby make a comparative analysis in terms of premium and levels of cover

Simplifies complex data

Most consumers may find the financial data related to insurance products and tax computation baffling. A calculator provides the data in a jiffy without hassles

Better product knowledge

Due to the aforementioned factors, customers get a better understanding of products offered by insurance providers

Customisation

A customers entered specific details related to his plan, date of birth, premium paying term and other details related to him or her

Quick handy tool

Customers can make use of premium calculator to make a quick assessment of the plan and how it works

Premium Calculator - How it Works

Aditya Sharma, a 27-year-old non-smoker male working in an IT company takes a HDFC Life Click 2 Protect Plus termlifeinsuranceplan on November 9th, 2015. HDFC Life Click 2 Protect Plus is a traditional non-participating term life insurance plan. Details of Aditya Sharma are as listed below:

Customer details

Description

Name

Aditya Sharma

Age

27

Gender

Male

Date of Birth

January 1st 1988

Smoker/Non-Smoker

Non-Smoker

The aforementioned details have to be entered into a premium calculator to get the following exact values

Sum Assured

Rs.1 crore

Policy Term

30 years

Premium Paying Term

30 years

Premium Frequency

Annual

Plan Option

Life option (family of the life assured receives the sum assured as a lumpsum amount in the event of the demise of the policyholder)

The aforementioned details have to be entered into a premium calculator to get the following exact values

Annual premium excluding taxes

Rs.7,981

Taxes

Rs.1117

Total premium including taxes

Rs.9,098

Premium due date

November 9th 2016

Extra Life Option

In case Sharma chooses the ‘extra life option’ available for this term insurance plan for the aforementioned sum assured, policy and premium paying term, his premium will be calculated as follows:

Annual premium excluding taxes

Rs.12,974

Taxes

Rs.1,816

Total premium including taxes

Rs.14,790

Premium due date

November 9th 2016

Note: The family of Sharma in the ‘extra life option’ will get the double of sum assured, i.e, Rs.2 crores in the event of the accidental death of Sharma.

Income Option

In case Sharma chooses the ‘Income Option’ available for this term insurance plan for the aforementioned sum assured, policy and premium paying term, his premium will be calculated as follows:

Annual premium excluding taxes

Rs.6,703

Taxes

Rs.938

Total premium including taxes

Rs.7,641

Premium due date

November 9th 2016

Note: The family of Sharma will receive Rs.10 lakhs as lumpsum and Rs.90 lakhs as monthly payout (Rs.50,000) over a period of 15 years in the event of death of Sharma.

Income Plus Option (Level)

In case Sharma chooses the ‘Income Plus Option’ available for this term insurance plan for the aforementioned sum assured, policy and premium paying term, his premium will be calculated as follows:

Annual premium excluding taxes

Rs.10,774

Taxes

Rs.1,508

Total premium including taxes

Rs.12,282

Premium due date

November 9th 2016

Note: The family of Sharma will receive Rs.1 crore as lumpsum and Rs.50,000 as a monthly payout for a period of 10 years in the event of death of Sharma.

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Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply BankBazaar's partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.

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