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  • Things You Should Know About Term Insurance Plans Premium Calculators

    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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