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A term insurance calculator can be a helpful tool when purchasing a term insurance plan in India. Buying a plan is fairly easy and less time-consuming, but it is the planning and budgeting that takes a lot of time. However, with the help of this simple online tool, you can speed up the process and make its purchase straightforward. Find out how a term insurance calculator assists in budgeting and planning on this page.
What is a term insurance calculator?
A term insurance calculator is a free online tool that can help determine the premium of the specific term insurance plan that you are planning on purchasing. It evaluates the results quite instantly, based on certain factors covering the aspects of your lifestyle, age, desired sum assured, etc. It is very easy to use and requires details like;
- Your name,
- Contact information,
- Date of birth,
- Annual income,
- Gender,
- Occupation,
- Education qualification,
- Optional riders,
- Sum assured,
- Smoking/nicotine consumption habits,
- And a few additional details.
Based on these factors, it calculates the premium amount that you need to pay for a selected plan. Furthermore, you can tweak the values of preferred sum assured, premium paying frequency, premium paying term, policy tenure, etc., to get relevant premium results for your desired coverage. Thus, using a term insurance calculator at the time of purchasing a term plan is considered imperative, as it assists you in understanding what you need to do to get the ideal coverage for your loved ones.
How does a term insurance calculator help in budgeting and planning?
The primary focus of investing in a term insurance plan is that it safeguards the financial security of your loved ones in your absence. However, it also has several other perks, such as the term insurance tax benefit, financial assistance acting as an income replacement for your loved ones, availability of riders and add-ons to get more tailored coverage, and so on. Hence, in order to get the best value for money, utilising a term insurance calculator is essential. Here’s how the various perks of a term insurance calculator help with planning and budgeting;
1. Maximizes tax benefit:
As we all know, according to Section 80C of the Income Tax Act 1961, the premiums paid against a term insurance plan qualify as deductions from your taxable income for up to INR 1.5 lakhs. A term insurance calculator can help you enjoy this term insurance tax benefit to the fullest by enabling you to evaluate your term plan’s premium and invest accordingly. Similarly, you can utilise the term insurance calculator to maximise the term insurance tax benefit under Section 80D and Section 10(10D) of the Income Tax Act 1961.
2. Assist in financial planning:
By giving you the assessed premium to be paid for your preferred term insurance plan within seconds, the calculator gives you a sufficient idea that you can use to create a financial plan for the future. This way, you can choose an ideal plan for your coverage needs well within your budget and avoid issues like missed premium payments.
3. Gives a clear idea of the cover:
A term insurance calculator shows results based on certain parameters that help you better understand the coverage you will be getting for the price. Understanding the plan is key to budgeting and planning when purchasing a term insurance policy. In addition, it also gives you an idea of the estimated term cover that your loved ones may need to fulfil their financial obligations in your absence.
4. Makes budgeting simpler:
The term insurance calculator shows aspects like life cover, total cover tenure, premium paying tenure, premium frequency, and death benefit, which you can tweak to find the premium amount for the plan of your choice. You can alter these parameters according to your needs to find an ideal cover for the price that stays within your desired budget.
5. Reduces time and effort:
One of the downsides of planning and budgeting when buying term insurance plans is the time and effort it requires. A term insurance calculator can significantly reduce such time and effort, by evaluating premiums for your desired plan on the basis of a few simple inputs. Additionally, all of these can be done online and from the comfort of your home.
6. Saves money
As we have already mentioned, the term insurance calculator lets you tweak the values of the total sum assured, cover tenure, premium paying tenure, and so on. By adjusting these values per your preference, you can find the ideal premium amount for your desired plan and even save a few bucks on the total premium paid in the process.
Conclusion:
All in all, the term insurance calculator is an effective tool that makes budgeting, planning and purchasing term insurance in India quite easy. By utilising it to its full potential, you can not only find the ideal premium for the plan of your choice but also enjoy a few additional benefits, like getting the maximum tax benefit, saving a few bucks on premium paid, saving time and effort, etc.
