A term life insurance calculator is an online tool designed to help you find the most affordable premium for your term plan online based on your financial requirements. In addition, you can modify the inputs based on the changing life scenarios and find the revised premium for your term insurance plans.
However, after determining the value from the term insurance calculator, you might find a slight variation in the premium provided by your insurance provider compared to the one determined from their term plan calculator, considering a few factors.
These factors can harbour different inputs based on individual personal lifestyles and perceptions that affect the premium.
Therefore, you must understand these factors to validate the term insurance premium payable calculated by your term insurance provider.
Limitations Of Term Insurance Calculators
A few factors affect the premium rate for term insurance plans that the term insurance plan calculator may not consider.
- Family’s medical history – Your family’s medical history is important in calculating the premium for your term insurance plan. For example, if your parents have been diagnosed with diabetes, blood pressure, etc., or a serious illness such as cancer, you are highly likely to get affected due to these illnesses at a later stage in your life. And it can affect your life expectancy. Therefore, your insurer might consider these factors and revise the premium rates.
- Lifestyle and habits – Your lifestyle is another factor affecting your health. For instance, if you consume alcohol or smoke regularly, you can develop heart or liver disease at a younger age. Your insurance provider will consider such habits to determine the term insurance premium.
Some insurers offer the term insurance calculator to determine the premium based on your smoking habit. For instance, Tata AIA Insurance provides the term insurance calculator that asks you to choose between the option ‘Smoker’ and ‘Non-Smoker.’
The term insurance calculator will calculate the premium based on this input and the other important personal and financial requirements to determine the premium. You can use the calculator to determine the sum assured and the premium and purchase the term plan online.
- Work environment – Your occupation and work environment are other important factors affecting the term insurance premium.
For example, suppose you work in construction sites, chemical industries, or other manufacturing sectors. In that case, you are more likely to meet with an accident than a person working in an office and having a clerical or administrative job. Therefore, the insurer might ask you to detail your work environment and fix the term insurance premium.
Apart from these few factors, the online term insurance calculator considers all the other important aspects, such as age, gender, type of term insurance, add-on rider options, life cover, premium payment mode, etc., to determine the term insurance premium. It simplifies calculating the term insurance premium with a few less time-consuming steps.
Therefore, a term plan calculator is useful for anyone considering purchasing a term life insurance policy. It can help you understand the cost of coverage and make informed decisions about your insurance needs.
The term insurance calculator is a tool that can help you determine the cost of a term insurance policy based on factors such as your age, gender, coverage amount, and term period. However, it’s important to note that the final premium may vary from the initial calculation due to other risk factors that insurers consider, such as medical history, work environment, lifestyle, and hobbies.
Therefore, knowing these factors and the few disadvantages of a term plan calculator is important while purchasing a term insurance policy.