How is term insurance premium calculated?

Nov 20, 2017 | 2 years ago | Read Time: 1 minute | By iKnowledge Team

Wondering how much premium you need for your term insurance? Use our term insurance premium calculator and get your premium calculated. All you need to share is your age, outstanding debt obligations, and annual income.

If you are starting early, here are two thumb rules you need to keep in mind when calculating your insurance coverage:

  • Age 25 to 35 years old: Add 15 – 18 times to your present annual income + outstanding debts or loans
  • Age 35 to 45 years old: Add 10 – 15 times to your present annual income + outstanding debts or loans

Although the above rules may be used to calculate the term insurance coverage, it may not provide an accurate amount. It is recommended you consider other factors such as your present age, retirement age, inflation, future expenses, existing liabilities, and others to calculate the required insurance coverage.

The amount you will pay as the premium is also a deciding factor. It is advisable to input as much accurate information as you can to get your quote, as each quote is personalised according to your policy needs.

You will need to provide the following information while using an online calculator.

  • Name
  • Riders
  • Age
  • Purchase year
  • Gender
  • Total premium amount
  • Date of birth
  • Tax liability
  • Type of plan
  • Premium payment term
  • Sum assured
  • Policy duration

An online term insurance calculator is a handy tool that allows you to compare and analyse different plans. Moreover, you are able to understand the workings of various policies and thus make an informed decision.

To know about AegonLife’s life insurance products, visit our home page.


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