How A Term Plan Calculator Can Help?

A term life insurance is a type of life insurance that provides life cover for a fixed period of time. Unlike whole life insurance , a term plan is active only for the specified number of years. A term life insurance can have a tenure of anything between 5 to 30 years.Now whenever it comes to a term plan, there are always three variables:

• The term of the policy (that is the number of years that the policy lasts)
• The premium that you have to pay regularly
• The sum assured, which is the death benefit payout that your nominee will receive in case you as the insured, pass away.

When you want to buy a term plan, these are the three things that must be decided before you can choose a plan of your liking. Usually, a policy buyer has an idea of the assured sum that they would like, and the number of years they would like the plan to last. They convey this to the insurer, who will calculate the premium that the buyer is liable to pay.Now it can be cumbersome to approach different insurers and ask about premiums for different plans. To make this simpler, insurers have come up with term plan calculators that are available on their websites. Using the calculator, you can instantly find out your premium amount by entering your required sum assured and tenure. Similarly, you can tweak your entries and get the desired premium you’re looking for.

• Compare different plans in one place Insurance companies have a variety of different plans to suit the needs of different people. A term plan calculator can help you compare different plans instantly, play around with the assured sum and tenure, and find out your premium.
• Calculators save time A normal calculator saves plenty of time, doesn't it? Similarly, a term plan calculator saves you the hassle of submitting your documents to different insurers and waiting to find out the specifics of your plan.
• It leads to a cost-effective purchase A term plan calculator is available at the click of a button online. And when one uses a calculator, they are more likely to buy the insurance plan itself online. This can make the term insurance a cost-effective purchase because online services are cheaper due to absence of intermediaries.

• You will be first required to fill out your personal details like name, date of birth, gender, marital status, income etc.
• You may be then asked to furnish your PAN number, Aadhar number, and also disclose family health related details.
• The third step involves entering your desired sum assured amount, the term of the policy and the premium paying mode, which can be monthly, quarterly, annually or lump sum.
• That’s it! Once you hit ‘Enter’, your premium amount will be displayed, based on your earlier entries.

If you’re satisfied with the results, you can go ahead and purchase the policy.Now that we know how a term plan calculator can help you purchase a term policy, let us find out some of the benefits of a term plan.

If you use the term plan calculator wisely, you can achieve low premiums with the highest assured sums. Generally speaking, term plan premiums are cheaper than other insurance options because of no ancillary benefits. Therefore, a term plan is your best option if you’re looking for low premiums.

Term plans can have shorter tenures that can be used for various reasons. For example, if you have a home loan of 75 lakh for a tenure of 15 years, you can opt for a term plan with a similar amount as an assured sum. In case you pass away, your family can use the death benefit and pay of the home loan, thus allowing them to keep their home.

Term plans also offer the flexibility of longer tenures that can be as long as 75 years. This ensures financial protection of your loved ones for an extended period of time.

Under section 80C, premiums paid for term insurance are eligible for deductions of up to Rs. 1.5 lakh in a financial year. The assured sum, when paid to the nominee, is also tax free under section 10(10D).

Thus, a term plan can be an amazing tool to protect your loved ones from financial burden in your absence. The death benefit, whether paid out as a lump sum amount, or paid out in installments for a number of years, can really help your family in paying school fees, rent, house EMIs etc. Using term plan calculators, you can choose the best plans and make their future secure.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.