Term Life Insurance Calculator - How Much Cover do I Require?

Term Life Insurance Calculator – How Much Cover do I Need?

Term Life insurance calculator helps in calculating the right insurance coverage for you accurately at the click of a button.
Term Life Insurance Calculator - How Much Cover do I Require?
Human Life has become too uncertain and unpredictable. The sudden demise of loved ones can leave the entire family emotionally, financially and physically unstable. Since no one can predict the future, there is no control over uncertainties like death. Death of the breadwinner of the family can cause a lot of emotional as well as financial turbulence in the family. Thus one should make arrangements to secure the future financial needs of the family. Term Insurance is one such excellent solution which helps in building the financial safety net for the family. All this at an affordable premium. In the event of death, the nominee stated by the policyholder get money, i.e. the death benefit. This money thus gives financial security to the family.

Term Insurance is the most basic form of Insurance coverage. It provides life insurance with no element of savings. Thus, it is the purest form of insurance.

Term Insurance Policies have a lot of benefits like:

  • They provide financial security and secure the financial future of the family.
  • The nominee gets the death benefit, i.e. lump sum amount on account of the death of the insured during the policy term.
  • Term insurance policies have a unique feature they provide high sum assured for low premiums.
  • Premiums paid towards Term Insurance Policies enjoy tax exemption under section 80C of the Income Tax Act, 1961.

Now that we have seen the benefits of Term Insurance there is one dilemma that everyone faces.

How much cover do I require?

No one is quite sure about the exact sum assured that is enough to secure the future financial needs of the family. This dilemma is easily solved by a tool called insurance calculator.

What is Insurance Calculator?

Insurance calculator is a tool which helps in calculating the basic sum assured required by an individual.

This tool is specifically designed to help us understand how much cover an individual needs monthly thus calculates the sum insured. The insurance calculator is easy and user-friendly. It is very simple and easy to understand. The calculator is immensely helpful while planning to buy a term insurance plan. It helps you to calculate the insurance coverage that you should have.

Basic thumb rules for Insurance Calculation

You need to calculate your current expenditure according to your lifestyle. Then you can plan your life insurance requirement accordingly.

Things to consider while calculating Life Insurance coverage

  • Basic monthly expenses which includes
  • Monthly grocery
  • Utility Bills
  • Rental expenses
  • Other miscellaneous monthly expenses like children school fees, etc.
  • Travel expenses
  • Eating out and family outing expenses
  • Entertainment

The thumb rule for opting for life insurance coverage is 20 times the gross annual income. Thus, if your gross annual income is Rs 15 lakhs p.a., then

Insurance Required= 20 X 15 lakhs= Rs 3 Crores

However, there are Online Term Life Insurance calculators which have better benefits.

  • Time-saving

Many insurance companies provide online insurance calculators. This helps an individual can get premium quotes within minutes. There is no need to submit any hard copies of documents to get premium quotes.

  • Easy comparison

Online term insurance calculator helps you in comparing various plans. It provides offers by various insurance companies on a single platform.

  • Accuracy

Term insurance calculators are utmost accurate. They state the premium quotes accurately once the individual has entered correct data.

An individual needs to enter all the fields accurately to get the right answer. The accuracy of a calculator is tremendous and within a fraction of a second. It displays accurate premium quotes for the term insurance plan of your choice.

The basic details that you need to furnish for a quote are:

  • Date of Birth of the insured
  • Gender
  • Marital Status
  • Occupation
  • Tenure

Some online term insurance calculators also ask for more precise details like:

  • Dependants in the family,
  • Financial details of individual etc.

To give an even more accurate amount of cover and the premium quote. As mentioned above, we have seen how the term insurance calculator helps in understanding accurately how much cover does an individual require for himself. The term insurance calculator is a tool which is easy, fast and accurate.