In the past few years, more people are insuring themselves because the corona pandemic has increased the awareness among the people regarding life insurance and made them understand the value of life insurance. It is one of the best ways to financially secure ourselves and our loved ones.
While purchasing life insurance, getting enough life insurance coverage is essential to make sure that your family members are cared for financially if you die. A life insurance calculator is the best way to figure out how much life insurance you need? And how much amount of premium do you need to pay for a life insurance policy. In this article, you will know everything about the life insurance premium calculator and the benefits of using it.
What is Life Insurance Premium?
The life insurance premium is one time or recurring payment that a policyholder makes towards his/her life insurance policy. Any life insurance plan is valid as per the guidelines of the insurance provider and if the policyholder pays premiums on time. Most of the policyholders provide the option of selecting the premium payment frequency like yearly, half-yearly, quarterly, and monthly. The sum assured that a policyholder gets is a factor of this premium that is paid as the sum assured when the policy benefits are activated.
A policy's premium varies and depends on the plan that one selects and his/her credential. Most of the time, a young and healthy person will get the same life insurance policy at a lower premium than a person who is older comparatively. In the same manner, a person who does not smoke gets a better year premium than a person who is a smoker. Apart from these, many other variables play a vital role in deciding the premium of a life insurance plan, and this is the reason the requirement of a life insurance rate calculator comes into the picture.
Table of Content
What is Life Insurance Premium Calculator?
A life insurance calculator is a tool that helps you to calculate the approximate amount of premiums you will have to pay for your life insurance policy. It is an easy-to-use and free-of-cost online tool that helps you get a conclusive decision of the premium amount and it helps the policy buyers find out life insurance premiums simply and quickly.
Life insurance calculators provide premium calculation results instantly. Moreover, a life insurance calculator also helps you calculate an estimate of the sum assured that you and your loved ones may require for financial security. It provides the premium for your life insurance policy according to the data entered by you.
Benefits of Life Insurance Premium Calculator
There are many benefits of life insurance premium calculators in India. Let us understand the benefits of a life insurance calculator:
- Easy to use
- Time-Saving
- Helps to make better Decision
- Multiple Quote Options
- Helps You Choose Additional Coverage
- Multiple calculations
- Easy to use: The life insurance premium calculator online is very simple and easy to use. Your life insurance premium can be obtained in two easy steps; the first step is to enter the basic details and then in the next step, the life insurance premiums from different insurance companies will be displayed on the screen. This ease of access is not available in case of offline calculations from the agents where they need to enter details in the calculation sheet each time and get the premium from it. In the case of an online life insurance premium calculator, the premium would be displayed in a fraction of seconds.
- Time-Saving: Another advantage of the life insurance calculator India is that these calculators can save ample time for the users. If the premiums are to be calculated using an offline rather, it would take much time as it involves manual calculations. Most people prefer to use an online term life insurance calculator to save time and energy. The online life insurance calculator from PolicyBachat can be used to calculate your life insurance premium without any errors thereby saving your time. Online life insurance quotes calculators involve no manual calculation thereby reducing the chance of errors.
- Multiple options: With online life insurance premium calculators, one can have multiple options before purchasing the life insurance policy. The life insurance plan calculator at PolicyBachat displays premiums from different insurance companies which helps the customer to get multiple quotes from different insurance companies. These can be used to compare the different plans and select the best insurance plan as per the requirement of the customer.
- Decision Making: You can compare, study, choose, and go through all the benefits, terms, and conditions of different life insurance policies with the help of the life insurance calculator. You can compare life insurance policies according to your requirements and budget. Life insurance premium calculators help you make the best purchasing decision.
- Multiple calculations: Multiple premium calculations for life insurance can be made using the life insurance calculator online. Customers can enter different values of sum assured or term and get the premium amount each time without a fraction of seconds. Manual calculations take time as each time the data needs to be entered freshly to get the premium, but in the case of an online life insurance cost calculator, the premium can be obtained spontaneously each time. For instance, if you want to check the premium at the maximum sum assured and minimum term or median sum assured and maximum term, it is possible to get the premium using the online term policy premium calculator.
- Helps You Choose Additional Coverage: Life insurance premium calculators are used to add additional coverage to the term plan. You can choose to add the additional riders available under the selected term insurance policy to increase the coverage while calculating the premium. With the help of a premium calculator, you can opt for the highest possible life cover amount that suits your budget and you can also opt for Additional Benefits at the best possible rate of premium offered by the insurance companies.
How Does a Life Insurance Premium Calculator Work?
A life insurance premium calculator is a tool that helps individuals and families to estimate their life insurance premiums. It is available online. The calculator uses a variety of inputs to predict how much the person will pay in life insurance premiums, including age, gender, family size, health status, etc.
Case Scenario:
For instance, let us assume that Mr. Anil is planning to take a life insurance policy and has not compared the premiums from different insurance companies before finalizing the life insurance policy. He has taken the life insurance policy from Company X for a term of 30 years, the sum assured is 1 Crore and the premium to be paid each year is Rs.10k.
After taking the policy he casually compared it with the other life insurance products where he found that the premium from Company Y is Rs.2k less than that of Company X, all the other requirements being the same. In this situation, he would end up paying Rs.2k extra each year which would amount to Rs.60k till the end of the policy term.
Had Mr. Anil compared before taking the life insurance policy from he would have saved Rs.60k in the long run which if invested somewhere he could have got better returns. This is the importance of comparing life insurance premiums using a life insurance calculator online before deciding the best life insurance company in India as the premium is a major factor.
Factors Affecting Life Insurance Premium Calculator
Life insurance premiums can be calculated using the life insurance premium calculator, but do you know what affects life insurance premiums? Below are the factors that influence the life insurance premium
- Age:
Life insurance premium primarily depends on the age of the prospect. It is important to note that the premium changes with each passing year as the risk of mortality increases. It is well known that the mortality rate is higher in the elders when compared to the youngsters. Life insurance premium increases with the increase in age of the prospect due to the high mortality ratio which can be observed to increase as the age increases.
Higher Age = Higher Premium
The higher the mortality ratio, the higher would be the premium charged by the insurance company. Hence, it is advisable to take a life insurance policy at a very young age to reduce the premium at old age as the life insurance premium calculator throws a high premium at old age.
- Gender:
Gender determines the life insurance premium to be paid by the customer. It can be noted that the premium for Women would be considerably lower than that of Men. This is because women are more likely to live on an average 5 years more than men which means that the mortality ratio for the same period would be less in women.
- Health History:
The health history of the prospect also plays an important role in deciding the premium to be charged by the insurance company. The life insurance calculator takes into account the health history of the prospect and decides on the acceptance of the proposal. Every insurance proposal requires the health history of the prospect to be taken into consideration before deciding on the acceptance of the proposal. Life insurance factors involve getting adequate information from the prospect regarding the health history such as pre-existing diseases if the prospect has undergone any treatments or operations, any hereditary diseases, etc.
- Sum Assured:
Sum assured is the maximum liability of the insurance company in case of death of the policyholder or maturity of the life insurance policy. The sum assured is paid to the nominee or legal heir in case of the death of the policyholder. Most of the insurance companies offer a sum assured of annual income x 10 times + loans/liabilities and this can be calculated using the online calculators available. The life insurance premium calculator India increases the premium if the sum assured is increased and decreases the premium when the sum assured is decreased.
Higher Sum Assured= Higher Premium
- Lifestyle:
The premium in the life insurance calculator increases if your lifestyle is risky i.e. smoking, drinking, or consuming tobacco. The life insurance premium calculator is designed to increase the premium or refer your proposal to the underwriter in case you have smoking or drinking habits which are considered risky elements in the life insurance underwriting process. The chance of death happening is high in the case of people smoking or drinking or consuming alcohol, this increases the mortality ratio where people have these habits.
- Hobbies / Occupation:
The occupation of the prospect also decides the life insurance premium is paid. For insurance, some occupations such as Persons working in Chemical, Fire Crackers, Army and police, etc. services are classified as Hazardous and pose a high level of risk for the insurance companies in terms of death claims. These occupations have higher mortality rates and thereby higher life insurance premiums.
Hobbies such as Scuba diving, Paragliding also attract the special attention of the underwriters as there is a high mortality ratio in people having these hobbies. The life insurance premium calculator determines the premium of the prospect after considering the hobbies and occupation of the prospect.
- Type of Policy:
The major factor determining life insurance premiums using the life insurance premium calculator is the type of life insurance plans opted by you. There are many types of life insurance policies such as Term insurance plans, Endowment insurance plans, Child plans, Pension plans, etc. All these types of life insurance policies have different premiums but all of them cover the life of the insured. It is advisable to opt for a life insurance company that provides better service and extensive insurance cover at the most affordable premiums.
- Family Health History:
Lastly but most importantly the family history of the applicant would also be considered before deciding the life insurance premium using the life insurance premium calculator. Many diseases would be passed to their offspring and are called hereditary diseases which can be passed from the parents to their children.
Underwriters consider these hereditary diseases at the time of deciding the life insurance premium to be paid by the applicant. There are cases where the underwriters have declined the proposals having hereditary diseases. So, hereditary disease also plays an important role in deciding the life insurance premium using the life insurance premium calculator.
How to Calculate Life Insurance Premium Online?
The life insurance premium calculator can be used to know your life insurance premium. The life insurance calculator available on the PolicyBachat portal is easy to use and is reliable as the quotes provided by the insurance companies will reflect on the portal without any errors.
The premium in the life insurance calculator changes with a change in the above-mentioned factors such as Age, monthly income, Sum Assured, Lifestyle changes, etc. The data entered in the life insurance premium calculator will be considered as the declaration from the customer and the premium will be displayed based on the input from the customer.
Steps to Use Life Insurance Calculator Online
At PolicyBachat, you need to follow these simple steps to calculate the premium for the life insurance instantly:
Step 1: The first step of using an online life insurance premium calculator is to visit the official website of PolicyBachat.
Step 2: The next step of using the life insurance policy calculator is to enter the below details clearly and correctly.
- Age of the applicant; to be entered as Date of Birth
- Name of the applicant
- Mobile Number
- Gender of the applicant
- Tobacco consumption; Yes or No
- Annual income from the options given in the calculator
- Educational Qualification
- Occupation type; Salaried or Self Employed
Step 3: In this step, you can enter your requirements such as:-
- Sum assured required under the life insurance policy
- Tenure – maximum age the coverage is required
- Premium payment type - Regular or Lump sum or Limited pay
- Premium payment frequency - Monthly or Quarterly or Half-yearly or Yearly
- Payout type - Lump sum or Income or Combination of both
- Add-ons such as Critical illness, Waiver of premium, and Accidental disability cover can be selected and the premium would change accordingly.
The premium figure displayed may be changed subject to the medical underwriting. It is important to note that the premium displayed is based on the information entered by you and the final life insurance premium might change depending on the decision taken by the underwriter considering the risk exposure.
Life Insurance Premium Calculation Sample Example
Life insurance premium calculations have complicated things and can’t be done by prospective customers on their own. A life insurance calculator is the best tool to compute the premiums of the life insurance policy. Let’s take a sample example of how a life insurance premium calculator works and how it will illustrate premium calculations.
| Plan Type |
Term Insurance Plan |
| Age |
27 years |
| Gender |
Female |
| Tobacco User |
No |
| Monthly Income |
30k |
| Policy Term |
10 years |
| Sum Assured |
Rs.10 lacs |
| Premium Payment Term |
Regular |
| Accident Death/ Critical Illness Add-ons: |
Selected(Optional) |
Note: Life insurance add-ons are offered by the insurance companies that provide additional coverage to your life insurance policies. Life insurance add-ons provide more coverage and protection. There are several types of life insurance riders, every life insurance rider has different purposes and offers different benefits. So, before purchasing a life insurance policy please note the add-ons that provide additional benefits to your policy.
Let us see the result premiums of this calculation
| Monthly Premium |
Rs.921/- |
| Quarterly Premium: |
Rs.2730/- |
| Half Yearly Premium |
Rs.5349/- |
| Yearly Premium |
Rs.10, 240/- |
Click on the below button and calculate your premium rates as per your requirement.
Calculate Premium
Reasons for the Cause of High life Insurance Premium
If you want to purchase life insurance plans, you may be curious about how much money will you have to pay for the life insurance. Multiple factors determine the premium and multiple reasons cause high life insurance premium rates. So before purchasing a life insurance policy you must consider some points to reduce the premium.
| Factor |
Effect on Premium |
| Age |
The higher the age, the higher would be the premium payable. |
| Occupation |
If you worked in risky places, the premium would be high. |
| Sum assured |
The higher the sum assured, the higher would be the premium payable. |
| Health History |
If you have pre-existing diseases, the premiums would be high. |
| Lifestyle |
If you’re a smoker/tobacco user the premiums are high. |
| Policy Tenure |
The longer the policy tenure, the lower would be the premium. |
| Premium Payment Frequency |
Premiums paid annually or half-yearly are lower compared to premiums paid quarterly or monthly. |
| Premium Payment Term |
Regular premium payments are lower as compared to limited premiums and single premiums. |
| Family Health History |
If you suffer from any medical complications or have a history of family illness, the premiums would be high |
Tips to Reduce Life Insurance Premium
- Online Purchase: Premiums for life insurance policies purchased online are comparatively less than purchasing life insurance policies offline as it requires no additional premium cost of purchasing them directly from the insurance company.
- Avoid Consumption of Tobacco/Alcohol: Health is considered the most important factor while calculating the premium for life insurance. The premium rates for non-tobacco/alcohol consumers are low compared to those who consume tobacco/alcohol.
- Choose the Best Possible Policy Term: The period of the whole policy term plays an important role in the calculation of policy premiums. If you buy life insurance policy for a longer term you can get low premiums as compared to premiums for short policy tenure.
- Add Riders Only If Required: Choose the riders wisely and opt for them only if you require them because additional coverage riders increase the number of premiums.
Life Insurance Premium Tax Deduction
Life Insurance Tax Benefits:
Life insurance policy not only provides financial protection for you and your family but also offers tax benefits under Section 80C of the Income Tax Act, 1961 and Section 10(10D) of the Income Tax Act, 1961. There are many life insurance plans out there from various insurance companies that can help you save on tax laws under various sections of the Income Tax Act, 1961.
Under section 80C income tax benefit the maximum amount that can be exempted from taxation is 1.5 Lakhs and under section 10(10D) income tax benefit, an amount received under a life insurance policy qualifies for this deduction. A sum received could be Sum allocated by way of bonus, Survival benefit, Maturity benefit, Surrender value, Death benefit, etc.
Other Types of Life Insurance Calculators
There are different types of other life insurance calculators available on official websites of life insurance companies such as
- Savings Amount Calculator
- Human Life Value calculator
- Body Mass Index Calculator
- Child Future Calculator
- Retirement Planning Calculator
- Mortality Risk Calculator
- Wealth Planning Calculator
Life Insurance Premium Calculator - FAQs
Can You Depend on Life Insurance Premium Calculators?
Life insurance premium calculators are used to calculate the policy premium rates. As compared to the manual calculation of premium, an online tool can be highly relied upon as there are no chances of error. In addition, life insurance premium calculations also provide results within a few seconds, thereby saving the effort as well as the time of the policy buyer. Therefore online life insurance premium calculators are highly recommended.
Where to Find Best Life Insurance Premium Calculator?
You can find the best life insurance premium calculator at PolicyBachat where you can compare life insurance premiums for different life insurance plans with different insurers. You can also find life insurance premium calculators on official websites of life insurance companies like MAX life insurance calculator, HDFC life insurance calculator, SBI life insurance calculator, LIC premium calculator, etc.
What are the Benefits of paying Life Insurance Premium Payment Online?
Paying life insurance premiums payments online is a convenient and secure way to pay your life insurance premiums.
Some of the benefits of paying life insurance premiums online are:
- Avoid having to visit a branch or call the company for payment.
- Paying your premiums in one easy transaction, instead of multiple payments.
- Pay your life insurance premium with confidence that your money will be protected by us.
How to Pay Life Insurance Premium Payment Online?
Pay life insurance online payment in multiple payment options such Net Banking, Credit card, Debit card, UPI wallets, and bill payment, etc. You can pay your premiums in multiple payment frequencies like monthly, quarterly, half-yearly, yearly.