A term plan calculator is a convenient tool for determining the cost and value of your term insurance investment. It is available online, and you can use it free of charge. Take a look at this article to know more about this convenient tool and how you can use it to your benefit when buying the perfect term life insurance policy for yourself.
What is a term plan calculator?
A term insurance calculator is similar to a fixed deposit calculator, where you feed in your financial information and are given some specific details. All you have to do is enter the coverage amount you wish to have in your term insurance policy, along with the chosen policy period. The term plan calculator will tell you how much premium you will be charged. This helps you to make a budget and plan your finances, so it turns out to be a handy tool.
How to use a term plan calculator?
The internet has made life easier for everyone. You get some very handy online tools, such as the fixed deposit calculator, to use free of charge, and it makes your financial journey smoother. A term plan calculator is also one such tool, which allows you to know the cost of your term plan. To use it, you need to:
- Log in to the website of your chosen life insurance provider
- Enter your desired term insurance coverage amount
- Enter the duration for which you wish to stay covered
- Add riders, if any
- See the results on your screen instantly
A term plan calculator is extremely convenient as it helps you to understand and plan your term insurance requirements.
Points to remember when using a term plan calculator
Here are some handy tips to remember when using a term insurance calculator:
Assess your needs
First and foremost, you need to assess your requirements. How much coverage do you need and for how long? Do you need to cover your kid’s education, or are you looking to cover a home loan? Do you have many dependent family members, or is your spouse also very well-settled? Assess your individual financial needs and goals to understand how much coverage you need, and for how long the protection is required. Once you have clarity about these factors, you can use the term plan calculator smoothly.
Know your budget
Whether you are using a fixed deposit calculator or planning to buy term insurance, you need to fix a budget before you start. Term insurance plans are available at different rates, and the cost depends on several factors such as coverage amount and duration of the plan. You must know how much you can spare for your term insurance coverage, as going over budget can be dangerous in the long run. Once you know what your price point is, you can use the term plan calculator effectively and get the results you wish for.
Adjust the coverage if needed
If the term plan calculator indicates that the premium is too steep, you can adjust the coverage. See if you can reduce the sum assured or modify the policy tenure to get a more affordable premium. You can also adjust the riders to see if your premium is suitable.
Look at different premium paying options
After using the term plan calculator and understanding your premium liability, you can explore the different premium paying options to find the perfect match. If you are financially capable of clearing the entire amount in one go, you may opt for a limited premium-paying option. Else, you can opt for the yearly, quarterly or monthly payment options as well. It is very beneficial to know what you have to pay, as that helps you to plan your finances and stick to your budget efficiently.
Speak to your financial advisor
While an online tool such as a term plan calculator is very convenient, you always have the option of speaking to your financial advisor when buying a term life insurance plan. Use the calculator to get a rough idea of what your premium would be, but decide after consulting the expert. They may guide you in the correct direction and help you make the perfect choice.
Conclusion
A term plan calculator is one of the best online tools. As mentioned above, it has several benefits and helps you to plan your finances while understanding your term insurance needs closely. Use the calculator before you buy term insurance, as that will help you to make an informed decision. Keep all the points mentioned above in mind and use the term plan calculator to understand and adjust your term insurance coverage. This will help you to have the best protection at the best rate, for the most suitable amount of time.