Life insurance offers multiple benefits in the form of protection, tax savings, wealth creation, and more. In general, a life insurance policy is simply about having financial assistance ready for you, like a safe haven, to protect not only you but also your family in your absence. These policies are designed to provide financial assistance in the hour of need and look after your family too.
A life insurance policy can also substitute the breadwinner’s income in his/her absence, which can help the family out in more ways than one. Further, under Section 80C of the Income Tax Act, you can avail tax exemptions for your life insurance policy as well. By knowing what is life insurance and selecting the right life insurance policy at the right time, you can ensure that you and your family are covered in the best way possible.
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The top factors that decide the premium rates of a life policy are your age, health habits, annual income, sum assured, and policy term. Based on these answers, premium rates vary from individual to individual and from insurer to insurer. Once you have these answers ready, the next step is to calculate your policy’s premium.
While choosing the right life insurance policy, it is essential to estimate the premium with the help of a life insurance premium calculator. Using an insurance premium calculator, you can determine the amount you will have to pay to your insurer. You can also figure out the amount to be paid on your premiums during the entire policy tenure.
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Benefits of Using A Life Insurance Premium Calculator
An insurance premium calculator makes it easy for you to understand more about the premium you will have to pay for the cover you need. To calculate your premiums based on the cover that you’re looking for, it is important to calculate using a premium calculator. These calculators assist you in comparing plans from different insurance companies and narrowing it down to the one that suits you the best.
1. Make comparison
The speed at which an insurance premium calculator does the calculation makes it easy for potential applicants to get multiple quotes. It is easy to get the premium rates of different insurance providers, compare them, and then select a quote that suits your needs. You can also make detailed comparisons about the tax savings and TDS return with the estimates you get using these calculators.
2. Save time
A life insurance premium calculator helps you effectively calculate your premium while saving a lot of your time. You don’t need to visit the branch office, call any of the agents, or do the tedious calculations yourself. Additionally, you won’t even have to provide many details or documents to get a quote for your life insurance. You simply have to fill in a few details in the life insurance premium calculator, and your job will be done in seconds.
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3. Cost-effective
In recent years, most companies have digitized their product and service offerings, and insurance companies have been in on the trend as well. Most insurance companies ensure that potential customers have access to life insurance premium calculator on their websites and mobile applications. You can access their insurance premium calculator 24 x 7 and free of cost as well.
4. Be prepared
Another benefit of using a life insurance premium calculator is that you get to know how much premium you have to pay to your insurer. You can also figure out the premium dates from the amortization table. You can stay ahead of your premium payments and even plan for your finances in the future accordingly.
How To Use A Life Insurance Premium Calculator?
Most of the life insurance premium calculators calculate your premium for you in a few quick steps. By simply filling in your basic information like income, retirement age, total asset, etc., you can check what should be the premium for a specific sum assured.
Step 1: The potential applicant has to fill out some basic details like their gender, age, marital status, number of children, and annual income, to name a few. These basic detail fields may vary a little based on the insurance company you approach.
Step 2: Next, the applicant has to shed some light on his/her expectations from the life insurance policy. Some of the details asked in this step would be the type or name of the policy, tenure for premium payment, the desired sum assured, and any additional riders he/she may want to add.
Step 3: Once you have entered these details, you can proceed, and the calculator will show you an estimated premium for life insurance.
With the help of an insurance premium calculator, you can also see a detailed summary about the premium, along with many other related factors.
The article mentions Section 80 C but did not mention 10D. Also while referring to it, it should have been rather specific than general. Under 80C of Income Tax Act, Total income falling under tax can also be, among other allowed deductions, reduced by 1.5 Lacs Rupees which amount can be related to life insurance premia, deferred annuity, contributions to provident fund, subscription to certain equity shares or debentures, etc. In case of 10 D, we understand that any sum received by Insured from Insurer including bonuses at maturity or before are fully tax free: this is, unlike other tax saving investments, most interesting feature.