How Term Insurance Calculator Helps in Financial Planning?
Today, with a wide range of term insurance plans available in the market, choosing the most comprehensive policy can be challenging. While selecting the right term insurance coverage for your family, you must compare the premium of different plans. This is where a term life insurance calculator plays an important role.
Term insurance calculator is specifically designed to help insurance buyers get an estimate of the monthly premium amount they must pay for the policy. Let us look at what a term insurance calculator is. And how you can use it for financial planning.
What is a term insurance calculator?
Term insurance is one of the simplest and most popular life insurance products in India. While buying a policy, the insurance companies determine the premium based on several factors like age, coverage amount, policy tenure, lifestyle habits, etc.
With the help of a term life insurance calculator, you can compute the approximate premium cost for the policy you want to buy. It is a free and easy-to-use online tool that allows you to make an informed insurance buying decision. You can use this handy tool to compare different plans and choose the right to suit your budget and requirements.
How can a term insurance calculator help you in planning your finances?
- Account for the insurance premium in your budget
When you know the exact premium you must pay for the term life insurance policy, you can accommodate the expenses in your budget and pay the required amount without any hassles. This will help you keep your policy active throughout the tenure and avoid the risk of policy lapse.
- Manage other expenses
When you calculate the premium of your term life insurance policy using the term insurance calculator, you will know your monthly, quarterly, or annual expenses, and you can adjust your budget for other expenses accordingly.
- Hedge against liabilities
Remember, you can adjust the various inputs on the term insurance premium calculator, such as the coverage amount, and policy tenure, multiple times, and the premium will vary accordingly. This will also help you choose the policy tenure correctly.
Knowing how long you will have insurance coverage, you can make an informed decision on choosing the loan tenure. You would not want to take a huge liability like a home loan beyond the term insurance term. This is because if something happens to you before repaying the loan fully, your family can use the term insurance payout to repay the debt.
- Choose the right coverage amount
By using the term insurance premium calculator, you can decide if you can avail the coverage you want within your given budget. This, in turn, will help you analyse if the life cover you have chosen is enough to provide adequate financial protection to your family, and you can plan your other investments accordingly. If the life cover you choose is not enough, then you may have to increase the premium budget.
Thus, as you can see, the term insurance calculator is a handy online tool that can help you in more than one way. So, if you are planning to purchase a new term plan in the near future, make sure to use this tool before making your final purchase decision. It will help you make your job easier.