Term insurance is a type of life insurance policy that comes with the promise to pay a specified sum of money to the nominee in case of the demise of the policyholder. Term insurance is a low-cost insurance plan and is extremely useful as it offers the dependent members of a family financial compensation. In this way, the financial life of each family member is secure and safeguarded, even in the worst of times.
Term insurance calculator or term life insurance calculator is a tool available online that helps estimate the coverage of the life insurance. This is the coverage that you will need based on your savings and status of income. The term insurance calculator helps calculate the returns of term insurance online and helps determine the best-suited term life insurance plans for you and your family.
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Comprehending the Usage of a Term Insurance Calculator
A term insurance calculator is a highly efficient yet simple-to-use tool available online that helps calculate the necessary coverage amount as per your individualistic needs. The term life insurance calculator is easy to use and can be especially helpful when planning for the purchase of a term insurance plan.
When you use the term insurance calculator, you are only required to provide a few necessary details/inputs, thereby making it a short, simple, and easy process. The calculator then calculates the coverage required to provide adequate protection to the members of your family. In addition to this, the term insurance calculator also recommends the best-suited policies by a range of insurance providers.
But what exactly constitutes strengthened financial planning? It is the process of securing the financial health of your family in your presence and in your absence. While term insurance ensures that your family does not have to worry about financial security and protection in your absence, health insurance ensures the very same but during a health-related emergency or crisis. Hence, the importance of health insurance.
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Key Information Required for the Use of a Term Insurance Calculator
The term insurance calculator helps calculate how large of life insurance you must have. The results of the term life insurance calculator are based on the key information provided below:
- Your age: This is your present age as per the acceptable proof documents for your age like the PAN card, Aadhar card etc.
- Desirable age of retirement: In case of the salaried individuals, the age of 60 years is the ideal age for retirement. You may also choose to retire later or earlier based on the life goals you have set for yourself.
- Existing life coverage: If you already have a life insurance plan which is in effect, the term insurance calculator helps calculate the additional life cover that you will need to have.
- Yearly income: Utilizing the information of your yearly income, the term life insurance calculator can estimate the amount of money your close ones or dependents will require to ensure financial security in the case of an untimely demise.
- Existing details of a loan: To understand your present-day liabilities better, you will need to provide the details of an outstanding home loan or other EMIs that you pay each month. These loans are representative of the current outstanding liabilities on you.
- Current substantial savings: If you have current savings, it is more likely that your dependents will be ‘financially safe’ in the case of untimely demise. The term-insurance calculator takes the current savings into account and then estimates the life coverage you might require.
- Insurance coverage: An insurance coverage is the estimated total or an added-on life insurance coverage that will be required based on your present income, age, liability, and the planned retirement age. Accompanied to the life coverage details, you will also get a list of term insurance plans to choose from.
On a Parting Note
Term insurance is undoubtedly the most common and simple product of life insurance in the market. At the time of purchasing the term plan, the policyholder will need to pay a premium in exchange for the life coverage provided by the insurer. A wide range of factors determine the policy’s premium rates and vary from one plan to another. This is where the role of a term insurance calculator comes to play and helps calculate the policy’s premium rate.