Term insurance can prove to be one of the most simple and cost-effective ways of securing your family’s financial future when something adversely occurs. Term insurance ensures that your family remains financially sound even when you are no longer around by purchasing a term insurance policy.
What Is Term Insurance?
Term insurance is one of the types of life insurance that offers coverage for a certain period. If the insured person dies during the coverage term, the insurer pays an agreed sum of money beforehand called a death benefit to the beneficiaries. Because term insurance has no saving or investment component, it’s way cheaper than other forms of life insurance. It also varies its coverage period, but can be as short as 5 years, or as long as 40 years depending on the particular policy.
Key Benefits of Term Insurance
Lower Premiums: The most important benefit of term insurance is that it is available at a much lower cost. Since it is only to provide coverage for a certain period and does not build up any cash value, the premium would be lower than other types of life insurance policies.
High Sum Assured: You can go for a high sum assured in the case of a term insurance plan. That way, if something happens to you, your family needs, including your everyday expenses, school, or even loan repayments, would be well taken care of.
Easy: Term insurance is uncomplicated cover products that don’t comprise complicated types combining cover with investment chances. It simply provides death benefits, which explains why it’s easy to understand and manage.
Tax Benefits: Payments of term insurance premiums under certain sections of income tax laws qualify for tax relief; hence added relief for the pocket of the policyholder.
Why Use a Term Insurance Calculator?
A term insurance calculator is a handy tool for making the process of finding the appropriate term insurance much easier by showing the amount you would have to pay in terms of premiums. This will help you figure out how much coverage you need based on your financial condition and the terms you would want for the policy.
How to take benefit of Term Insurance Calculator
Premium Estimation: The calculator gives an idea of the premium amount payable for you depending on your age, the coverage amount you desire, the policy term, and other such details. This would be of great help in knowing ahead of time whether a particular policy falls into one’s budget requirements or not.
Comparison Tool: Compare the coverage amounts and other policy terms instantly, you could compare a variety of cases and select the one that suits your financial goals.
Personalised Inputs: You can personalize the major variables – the coverage amount, term length, and additional riders – in this calculator. Given its flexibility, you can let your policy fit your needs.
To initiate a term insurance calculator, follow the steps mentioned below:
Enter Personal Information: Some basic personal details, including your age and gender, along with whether you smoke or not. All this information will then come to influence the premium you are supposed to pay, as certain groups, such as non-smokers, usually receive lower rates.
Quantify the Amount of Coverage: You need to decide as to how much coverage you want under your policy. You would need to consider how much your family is likely to require in the future in terms of living costs, education costs, and any other outstanding debts.
Determine the Term: Determine how long you wish the coverage to last. The shorter the term, the lesser will your premium be, but the longer will be the period that the term will cover your family.
Calculate the Estimated Premium: Once you have entered all the details, your calculator will indicate the amount of the estimated premium. This estimate will give you an excellent idea of how much you would need to pay for the term and the coverage selected.
Factors That Influence Term Insurance Premiums
The premium of term insurance is based on various criteria. Understanding all the factors involved can help you choose the most appropriate coverage for your budget and needs.
Age: The person with a lesser age pays smaller premiums as they are considered a lesser risk by the insurer. Term insurance bought at an early age therefore locks in the lower rates.
Health Status: The applicant’s health status largely determines the premium rates. Healthy applicants will usually score better than those with pre-existing medical conditions because they will tend to spend less on medical bills.
Lifestyle: Lifestyle some risky habits or lifestyle choices are bound to attract higher premiums, especially if they are deemed unhealthy for one’s health. These include smokers and people who expose themselves to habits that may be risky to their health. Non-smokers and people with healthy lifestyles attract lower premiums.
Coverage Amount: The sum you choose as coverage will directly determine the amount of premiums that are to be paid. You will need to balance enough protection with affordability.
Policy Term: Policies covering longer periods result in higher premiums because the insurer is at risk for a longer time.
Key features of the HDFC Life Insurance App:
Term Insurance Calculator: The app comes with an in-built term insurance calculator that will enable you to calculate your premium without much hassle. The app allows you to calculate and then assess your plan options without much hassle.
Policy Management: The app provides a direct means of policy management; you can view your policies, track renewals, or monitor your insurance status. There is no offline paperwork involved; it streamlines the entire procedure.
Online Payment of Premium: You can pay your premium directly through the app to never miss a premium. The app even gives you payment reminders to avoid missing any premiums.
Ending Note
Term insurance can be part of your financial plan that secures your family in the event of anything happening to you. Utilizing a term insurance calculator is easy, determining the right coverage amount and term before making these crucial decisions. Managing your term insurance becomes much simpler with digital solutions like the HDFC Life Insurance App. Take charge of your financial future by checking out your options today.