How Can You Use A Term Insurance Calculator Effectively?


What is term insurance?

A term life insurance policy guarantees that, in the event of the policyholder’s passing, the nominee will receive a certain amount of money. This low-cost life insurance policy is highly beneficial because it provides your dependant family members with financial support. In this way, they might have financial security even in the event of your unexpected passing away. It also offers you several term insurance tax benefits.

How to use a term insurance calculator correctly 

A term insurance calculator is a tool you may use online to determine the amount of coverage required based on your needs. You only need to input a few data points when using the term insurance calculator. The calculator will then inform you of the amount of coverage needed to fully safeguard your family. Additionally, it suggests the best plans provided by various insurance companies. 

How to use the calculator for term insurance? 

Your input into this tool has a significant impact on the outcomes, which are based on things like: 

  • Your age: According to recognised age proof certificates like Aadhaar, PAN, etc., this is your current age. 
  • Desired retirement age: Although 60 years of age is typically thought of as the age of retirement for salaried workers, you may choose to retire earlier or later based on your life goals. 
  • Existing life cover: The term insurance calculator can assist you in determining how much additional life cover you require if you already have a term plan or regular life insurance policy in force. 
  • Annual income: The calculator can predict how much money your loved ones and dependents will need to provide financial security in the event of your untimely passing away using the information about your annual income. 
  • Current savings: If you have a sizeable amount saved up, your dependents are more likely to be secure financially in the event of your untimely passing away. Therefore, the calculator factors in your present funds before determining how much life insurance you could need. 

The calculator will produce the following result using the information you gave above: 

Insurance cover: Based on your present income, liabilities, age, and anticipated retirement age. This is the expected total or supplementary life insurance coverage that you will need. 

You will also receive a brief list of term insurance from top insurers, along with the annual premium payment required for each plan and the information regarding life insurance.

Steps to use the calculator:

Step 1: Enter your information, including your gender, annual income from all sources, use of alcohol and tobacco, employment status (salaried or self-employed), and date of birth.

Step 2: The premiums from various insurance providers will now be shown on the screen. To receive the desired premium, you can adjust the details, including Coverage, Term, Premium Payment Method, Mode of Claim Settlement, etc., and submit the information. 

Step 3: Before filling out the proposal form data, choose the best life insurance plan and pay the premium to the insurance provider.

The advantages of term insurance:

Buying term insurance coverage has advantages. Here are a few of the most well-liked advantages: 

  • High sum assured at low premiums – The cost of term insurance policies premiums is quite low. In reality, when compared to endowment policies and other types of conventional life insurance, term insurance plans offer the lowest prices. This enables you to affordably provide for your family’s financial needs in your absence. *All savings are provided by the insurer as per the IRDAI-approved insurance plan. Standard T&C apply.
  • Tax advantages – Term insurance products also provide you with term insurance tax benefits. By acquiring a term insurance policy, you can receive tax advantages in three distinct ways: 
  • High assured amount for low premiums Premium payments up to 1.5 lakh are eligible for tax deductions each year under Section 80C of the Income Tax Act. This benefit is available for premium payments for you, your spouse, and your kids. 
  • Section 80D You may deduct up to ₹ 25,000 in taxes annually from the monthly payments for any add-on riders included in your term plan, such as hospital care, surgical care, and critical illness riders. 
  • Section 10 (10D) According to Section 10, in the unfortunate event of the policyholder’s passing, the maturity benefits are completely tax-free. There is no tax due on any of the money paid to the beneficiaries. There is no cap on the amount that can be received using this. * Currently, there are 2 tax regimes in India – new and old. To get the tax benefit you desire, choose the correct one after consulting an expert. You can opt for a regime change during the next financial year.
  • Claim settlement assurance – As long as your policy has been in effect for three years and you have stated all of your information accurately, you may be sure that your claim will be settled.  



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