Purchasing a suitable term insurance policy can be a bit challenging if you don't know the amount of coverage required. A term plan calculator comes to your help here. It helps in assessing the cover amount required to financially secure your family and calculates your premium payments. Every insurance plan has a different premium depending on the insured's needs. So, the calculator can help you make an informed decision when you buy a term policy.
Here are 5 things to take into account when you use a term policy calculator and the various benefits of using it.
5 Things to Consider When You Use a Term Insurance Calculator
The Plan's Duration
The duration of term insurance depends on your (the policyholder's) health and age. In the event of your unfortunate death before the policy matures, a death benefit is given to your beneficiary. So, you can choose a term, considering your regular expenses and your family's financial requirements.
Amount of Cover
If you are young when you purchase the insurance policy, your coverage must be at least 15 times your yearly income. If you are older than 40, the chosen coverage must be ideally 10 times your annual income.
Your Annual Income
Before buying a term policy, you should check your annual income. The term plan calculator helps you calculate the premiums depending on your financial needs and annual income.
Frequency of Premium Payment
The frequency of premium payments can be annual, half-yearly, quarterly or monthly. You can choose a suitable frequency after considering your existing liabilities and financial capability. Some plans allow you to pay all the premiums in one go as a lump sum.
Goals and Budget
Before purchasing term insurance, you must review your financial goals like your children's higher studies, their marriage and your retirement. If you know your goals, you can budget suitably for them.
Reasons to Use a Term Insurance Calculator
Calculate the Cover Accurately
Using a term plan calculator, you can calculate the amount of premium payment accurately.
Save Time and Money
You can use a term policy calculator quickly, free of cost. It also helps you save on paying brokerage to an agent if you purchase a plan offline.
Use Easily
Since a term insurance calculator works online, you can use it anytime anywhere without any trouble.
Get Transparency
The calculator works transparently since you can see what variables are used to calculate the premium amount payable. Plus it transparently shows the details of different plans for easy comparison.
Compare Policies Easily
When you buy a term plan, it's a good idea to compare the various plans offered under it by the insurer. You can do that easily with the help of a term plan calculator. You can compare the plans depending on their benefits, exclusions, inclusions, premiums and other factors to opt for the one that suits your budget and requirements.
Don't forget to use a term policy calculator before buying term insurance to make an informed decision. Make sure to purchase the plan from a well-known insurance provider in India.
