Financial security has always been among the utmost concerns of people who want the well-being of their loved ones in case anything untoward would befall them. Term insurance is on the top list of dependable ways to secure one’s financial future. Simply put, term insurance is a life insurance product that covers a policyholder for a specific period. If the nominee happens to die within the term of the policy, then the death benefit will be paid to the nominee.
Term Insurance
Term insurance is a pure life insurance plan that gives you coverage for a specific term, usually from 5 years to 40 years. This plan is primarily meant to provide an economic safeguard to your dependents in case of your untimely death during the tenure of the policy.
Advantages of Term Life
- Affordability: Term insurance has the foremost advantage of its affordability. While compared to any other life insurance policy, the term plans give quite a high cover for relatively lower premiums.
- High Cover: For the said purpose, one may take term insurance that accommodates a high coverage amount to ensure that at the time of his death, his family’s needs are taken care of, especially if he has liabilities such as loans or dependents such as children or old parents.
- Flexibility: There is an easy way to choose a term insurance plan that best fits your requirements as far as the term and amount are concerned. Most of the insurers have helped people get customized policies according to their financial goals.
- Tax Benefits: Under the Income Tax Act, the premium paid towards term insurance is eligible under Section 80C for deductions. Also, the death benefit received by the nominee is completely tax-free under Section 10(10D).
What is a term insurance calculator?
A term insurance calculator is a very simple online tool that helps you estimate the premium amount for your term insurance plan. With the help of such a calculator, you can simply fill in the appropriate details such as age, income, health status, coverage amount, and even the duration of the policy, to get an estimated premium amount. The term insurance calculator helps plan your finances because you can know the premium you will be required to pay for your desired coverage.
How to Use a Term Insurance Calculator
- Basic Information: The first step to using a term insurance calculator is to enter basic information about you like your age, gender, and smoke or not as all these factors greatly affect the premium since a non-smoker and a younger person tend to pay a lesser premium.
- Coverage Amount and Policy Term: After delivering all the basic information for the policy, there comes the coverage amount which you would want to secure for your family. The more the coverage, the higher the premium, quite obviously. Along with the coverage amount, one needs to choose the policy term.
- Enter Health Information: The greatest determinant of your term insurance premium is related to health. You might be asked about any pre-existing medical conditions, lifestyle habits like smoking and drinking, and your general health status in the form of a term insurance calculator.
- Fetch Premium Quote: After filling out all the details that are mandatory to be filled in, the term insurance calculator will provide you with an approximate value of what the premium would be.
Factors That Determine Term Insurance Premium
- Age: Age is one of the prime risk drivers of the premium. Young people are considered to be low-risk and therefore the premium paid is less as compared to older people.
- Health Status: Those patients suffering from diabetes, hypertension, and heart problems fetch higher premiums. You receive lower-cost term insurance if your health condition is better.
- Lifestyle Habits: Smokers, alcoholics, or others with unhealthy lifestyle habits can be pretty expensive. Non-smokers who are healthy and lifestyle-oriented usually pay less.
- Coverage Amount: Of course, the more you select to be covered, the more you’ll pay. Balancing the need for more coverage with your ability to pay the premium is worth it.
- Policy Term: The policy term also determines your premium. The longer the policy term is, the more will be the premiums because the insurer is covering you for a more extended period.
- Occupation: Depending upon the profession or occupation, you may earn higher premiums because certain professions like mining or construction are exposed to greater accidents or health hazards.
HDFC Life Insurance App
With digital platforms on the rise, managing your term insurance has never been easier. The HDFC Life Insurance App is available for both Android versions from the Google Play Store and iOS versions from the Apple App Store: a cross-platform tool that makes purchasing and further managing term insurance policies simple.
Key Features of HDFC Life Insurance App
- Term Insurance Calculator: With this app, you can check how much you’ll have to pay in premiums using its term insurance calculator. Using this feature, you would simply have to input a few details and get an estimate of your premium.
- Policy Management: Given that the HDFC Life Insurance App manages all policy features, there shall be renewals of your coverage to track the performance of your funds. Offline procedures will then come to a stop and thereby facilitate seamless policy management.
- Premium Payments: Premium payments are directly possible from the application. This will avoid the hassles that accompany non-digital payment of premiums. Reminders for payments can be set so that no premium is left out.
- Documentation and Claims Update: It offers updating of documents, observance of claims, and also options for finding nearby branches; in short, one-stop solution for all needs related to insurance.
Conclusion
Term insurance is the most important component of any good financial planning, as it would ensure much-needed finances for your family if you were to leave the world a little too early. Knowing what influences your premium and using a term insurance calculator will guide you towards better-informed decisions regarding your coverage. Tools such as the HDFC Life Insurance App make the process simpler in terms of purchase, management, and renewal of policy.