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How to Calculate Life Insurance Premium

You can easily calculate monthly life insurance premium by using life insurance premium calculator at Aditya Birla Sun Life and choose the best life insurance plan based on

When you buy a life insurance plan, you have to be cautious about a number of factors. The cost of the plan is a very important factor. While everyone likes to have a high cover, you must remember that a high cover brings along a high premium too. You, however, must have a premium that is affordable to you; else you will end up defaulting on the premium payment. So use an insurance premium calculator before you buy the life insurance plan. This will help you understand what your financial liabilities towards the plan will be.

What is an insurance premium calculator?

As the name suggests, an insurance premium calculator helps you calculate what your premium for the life insurance plan will be. These calculators are easily available online and can be used quickly and conveniently. To get the result, you have to enter:
  • The cover you are looking at
  • The policy period you are looking at
  • Your age
  • Your annual income
  • Whether or not you smoke
  • Your contact details
Once you enter these details, the life insurance premium calculator will tell you how much premium you have to pay for the life insurance plan.
What are the different frequencies of premium payment?

There are four frequencies in which you can choose to pay your life insurance premiums. They are:

  • Annual
  • Semi-annual
  • Quarterly
  • Monthly
Most people opt for the annual premiums. This is mainly because the premiums become cheaper when you opt for this payment term. The insurance companies almost always offer a discount to the policyholders who pay annual premiums. When paid annually and in one go, there is no room for defaults. This lowers the risks for the insurance providers and so they offer discounts on the annual payments.

Monthly premium payments are actually the least common type of premium payments. This however doesn't mean that it is not an available option. If you wish to make monthly payments, you are welcome to do so. Many people opt for the monthly insurance premiums because it helps them plan out their finances. If you too like making monthly budgets and paying off the dues accordingly, go right ahead. Use an insurance premium calculator to know how much your monthly premium will be. This will make it even simpler for you to budget your monthly expenses.

Premium – an important factor
The premium you pay on your life insurance plan is very important. It determines the amount of cover you get. However, the premium should not be the only factor to consider when buying a life insurance plan. You also have to take certain other points into consideration. Firstly, you must see how good the claim settlement ratio of the insurance company is. It is highly advisable to buy a plan from an insurance provider who has a good claim settlement ratio.

Next, you have to determine whether or not the terms and conditions associated with the life insurance plans are suitable for you. You won't be able to get the maximum benefits out of your insurance plan if the clauses are unsatisfactory. So read through the fine print carefully before you buy the plan.

In a nutshell
You can easily calculate your life insurance premium by using an insurance premium calculator. These calculators are widely and easily available both online and offline. Keep the points mentioned above in mind before you get a plan. Calculate the premium and see if it is affordable. Also check if the plan is suitable for you or not. Once you are satisfied with all the parameters, go ahead and buy the most suitable life insurance plan for yourself.