Every earning individual aims to provide for their loved ones and offer them financial security, but it is also important to face the fact that you need an insurance policy to cover all your bases and support them even when you are not around. The past year especially has shown us how bad times can get and how valuable every life is. More and more earning individuals are switching towards finding a safer and financially secure way of looking after their family even in their absence.
With the help of a term policy, you can support your family financially and ensure that they do not get burdened with expenditure or lose out on their independence. If you are thinking about buying life insurance, then make it a point to run the numbers and calculate your premium using the term plan premium calculator online.
How To Decide The Benefit Amount Of Your Term Plan?
The main purpose of the term insurance plan’s coverage amount is to financially secure the family of the policyholder in their absence. Therefore, it is important for the policyholder to know how much of their financial contribution is needed by their family to run smoothly even in their absence.
Here are a few things you must keep in mind before finalising the sum assured you need from the term insurance:
- Sole Breadwinners
If you are the sole breadwinner of your family, then it is more vital to have a bigger coverage amount as your family will have an exhaustive number of bills and expenses to handle in your absence.
Making it easy for your family to survive and not be financially burdened is all up to you and the decisions you make while customising your term insurance plans.
- Financial Liabilities
Right from your home loan or car loan EMIs to saving for a wedding and from providing education to your children’s to investing for their marriage, a lot of expenses can come in the way of your savings.
Keep a tab of all your near and future potential expenses to understand exactly how much coverage your family will need from a term insurance policy.
A term plan calculator can help you evaluate your earnings, navigate through your current expenses, and tell you approximately how much benefit amount will your loved ones need from your term plan.
How To Use The Term Life Insurance Calculator?
In the insurance industry, the general thumb rule when it comes to term insurance is knowing that 10 to 20 times of an individual’s take-home income will suffice in looking after the dependents’ expenses.
Whenever you are in doubt of how much term life policy you need to cover your family financially, a term life insurance calculator can offer you an approximation to decide better.
- A term plan premium calculator is very simple to use as it asks for your current age and annual income to run calculations.
- With the help of these calculators, not only can you know how much sum assured you need from the term insurance but also how much premium you should pay
- The term plan premium calculator will also help you decide your premium paying frequency.
Another important aspect that a term plan premium calculator can help with is comparing term insurance policies online. You can get quotes from leading insurance companies and compare the term insurance plans of different insurers to get the most of term insurance benefits.
An ideal way to choose the best term insurance policy is by comparing how high of a claim settlement ratio can a particular insurer guarantee because that ensures that your policy’s claim process will be stress-free for your family.
Bottom Line: Remember To Always Use A Term Plan Premium Calculator
All in all, a term plan premium calculator can help you avoid human errors and offer a quicker and hassle-free calculation. You can take a quick scan of all your current expenses, liabilities, and near-future expenditures to come to an accurate conclusion.
Besides, according to the Income Tax Act of 1961, you can avail of a tax deduction of up to Rs. 1,50,000 on your premiums as per the old tax regime every year, under section 80C. And you know how to calculate this without breaking any sweat?
Use an online income tax calculator for free! For as long as your term plan remains active and you continue paying the premiums, you can enjoy the tax benefit at ease.
Remember, a term insurance policy is more than just a tax-saving tool or a portfolio-worthy addition in today’s times. It is always good to cover your family financially, but it is more important to know just how much cover they would need in your absence. Besides, with the ease, that term plan premium calculators provide, in terms of understanding the policy details, and making an informed decision!