Factors for Calculating Your Term Insurance Premiums

One of the simplest forms of insurance, term policies offer your loved ones much needed financial protection when you are not around. As a policyholder, if you pass away during the term of the policy, your family gets a sum assured that can help them deal with any financial difficulties or support them in achieving their dreams. Since term plans provide pure insurance coverage, they are highly affordable!

You can find a plethora of term insurance options online that cater to varied requirements. If you are planning to buy a term policy, then you will want to know the premium you will have to pay. Thanks to provisions like a term plan calculator that allows you to get an estimate of premiums you have to incur. In addition to that, it helps you pick the right plan that fits your budget and needs as they help you compare plans.

While using a term insurance plan calculator, there are certain factors you need to keep in mind to arrive at a realistic estimate. Listed below are those aspects:

1. Insurance Needs
Why do you need term insurance? While some people want to simply cover their loved ones’ financial future, others want to get life stage protection to facilitate major milestones along with financial security for their families. As mentioned before, there are an array of term policies catering to different needs of people.

Identify your objective for buying a term plan. It will help you determine the amount of coverage you need and help you narrow down your choice of term plans.

2. Your Age
Age is an important factor when using a term plan calculator to get an accurate estimate of premiums. When it comes to term insurance plans, the earlier you begin investing, the lesser the amount of premium you have to pay. This is because the cover is based on factors including health and life expectancy. When you are young, you are healthy and less prone to serious conditions, making a term plan more affordable for you. Without adding your age, you will not be able to arrive at the right estimate of the premium amount.

3. Your Gender
Yes, both men and women are equal. But there are certain needs and risks unique to both genders. This includes everything from longevity and responsibilities to health risks. For instance, women are known to live longer than men, whereas men are highly prone to cardiovascular conditions like heart attacks than women.

Term insurance coverage and premium will differ based on such aspects specific to the gender. So, let’s say you are a woman. Then, the term insurance plan calculator will show a lower premium rate than for a man of the same age due to the longevity factor.

4. Tenure of the Term Plan
The duration of your term insurance policy plays an important role in calculating your policy premium. Like it is with age, the longer the term of your insurance policy, the lesser the premium you have to incur.

For instance, when you start early at the age of 25 or 30, you get a long period of time to save up a substantial coverage as compared to when you begin in your 40s. Thus, you pay less premium for an adequate amount of coverage when you purchase a term plan for a long duration. Keep this in mind when using a term plan calculator and buying a policy.

5. Your Occupation

Last but not least, you need to mention the field you work in when figuring out the premium to be paid. Certain occupations like manufacturing, mining, freight and shipping, etc., carry an ample amount of danger as opposed to working as a professional with a desk job. The risk you are exposed to will affect the premium of your term plan, making your profession a critical parameter for the calculation of premium.

With digitization, buying term insurance is a matter of a few clicks. Utilize a term insurance plan calculator to get suitable insurance for yourself.