Know Your Insurance Premium Using a Life Insurance Calculator

A life insurance premium calculator can be an effective tool to manage your insurance premium payments. By following some simple steps, you can use this tool to figure out the sum assured, premium payment and other benefits of an insurance plan.

A life insurance premium calculator is free online software available on the official website of an insurance firm that potential policy buyers can use to calculate the amount of yearly or monthly premium that they need to pay to get the desired sum assured.

Read further to know the steps involved in using an insurance premium calculator.

Steps to Use A Life Insurance Calculator

Visit the link containing the free online insurance calculator inside the official website of your insurance provider. Once landed, follow the steps mentioned herein. Note that the steps may change slightly depending on the calculator you use, but the basics remain the same.

Step 1: Personal Details

  • Select insurance category and insurance product
  • Enter your date of birth
  • Select your gender
  • Select your smoking preferences

Step 2: Plan Details

Select the following details

  • The sum assured amount
  • Policy term
  • Premium paying term
  • Premium frequency

Step 3: Add Ons

Select the available add ons that you would like to include in your plan. While selecting add-ons is optional, you might consider including some useful add ons like

  • Personal accident cover
  • Accidental disability cover

Now, click on the “Calculate” option, and the life insurance calculator will show you the exact annual premium amount that you will need to pay along with the total amount of sum assured.

Advantages of Using a Life Insurance Calculator

  • Minimal Human Error

Since it is a tech-enabled tool that works on the user’s inputs, there are fewer chances of error as there is no human interaction or manual calculations involved.

  • Easily Customizable

You can experiment with different insurance premiums to know how much amount your nominee can get against paying a specific premium. Furthermore, you can see how much extra premium you will be paying if you choose some additional riders.

  • Compare Different Insurances

You can easily compare different insurance premiums at once using the insurance premium calculator without manually poring over different insurance offer documents, which also takes a lot of time.

Premium Payment Options

Once you decide on the insurance premium using the online premium calculator, you can consider buying insurance online without any hassle.

But both online and offline insurance buyers get various premium payment options such as

  • UPI payments
  • Internet banking
  • Credit card/ Debit card payments
  • Electronic clearing services
  • Traditional payment options include cheque, demand draft or payment at the branch offices.

Factors Affecting Insurance Premiums

While you can easily find out the premium you need to pay using a premium calculator, you should know the factors

that can affect the cost of your premiums.

  • Age

You are likely to get a better premium rate from your insurer if you buy insurance at an early age since, at a young age, you are less prone to critical illnesses or death.

  • Lifestyle

Unhealthy habits like smoking or consumption of alcohol can cost you a significantly higher premium. It is better to stick to a healthy lifestyle to secure lesser premium amounts.

  • Insurance Coverage

Your insurance premium will be directly proportional to the coverage you seek. You will need to pay more premium for a higher sum assured.

Insurance is an integral part of personal finance, and life insurance premium calculators can be of great help in sorting things out. However, also consider the reputation of the insurance firm as well before making an informed decision.

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