How to Calculate your Term Insurance Premium?

Calculate your Term Insurance Premium

To provide a financial protection to your family in your absence, you are required to invest in a good life insurance policy. There are different types of life insurance policies that you can choose from. However, if you aim to provide complete protection to them from life risks, you should opt for a term insurance.

Like every insurance policy, you are required to pay a premium towards this policy, as well. The premium that you pay is dependent on many factors. What are these factors? And how can you calculate the premium of your insurance policy? Read on to know more about this.

What is a term insurance?

A term insurance is a type oflife insurance policy. In this insurance plan, the insurer and the insured get in an agreement, whereupon the insurer will compensate the dependents of the policyholder. This compensation is disbursed in the event of the policyholder’s untimely demise during the policy term. The sum assured paid by the insurer is based on the plan that you opt for. The sum assured will help your family manage vital expenses and be financially protected from life risks.

What are the deciding factors of the premium?

The following are the factors that decide the premium that you pay towards your insurance policy:

  1. Your lifestyle

Insurers consider your lifestyle when calculating how much premium you are required to pay towards your policy. If you happen to be a smoker or drinker, the premium would be higher compared to that of a non-smoker or non-drinker. As smoking and drinking affects your health in the long-term, there is a higher probability that your insurer would be required to compensate. You should keep this in mind when purchasing your policy.

  1. Your age
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It is advised to purchase this insurance policy at a younger age rather than at a later life stage. When you are young, your body is fit and has higher immunityagainst diseases. However, as you age, your body goes through many changes which also impacts your capability of battling illnesses and diseases. This means there is a higher chance that your insurer will have to compensate for. Therefore, you should invest in this policy at a young age.

  1. Your medical history

Medical check-ups are a pre-requisite when purchasing term insurance, meaning the insurer would want to check your fitness. If you happen to have a pre-existing medical condition, the insurer will charge you a higher premium to compensate for the increased risk that is being underwritten.

  1. Your occupation

If you have a job that has a low-risk factor, your premium would be lower. However, if you work at places with a higher-risk factor such as construction sites, manufacturing and chemical plants or in the defence sector, your life insurance premium would be higher.

How to calculate the premium of your policy?

If you are planning on buying this insurance policy, you can use the term insurance premium calculator to get an idea about your premium. Here are the steps for using this calculator:

  1. Access the calculator

Visit the website of your preferred insurer. The calculator is easily accessible from the landing page of their website. The calculator is free to use and does not require to enter any payment details.

  1. Enter the details

You are required to enter details such as your annual income, your profession, your age, and gender and if you smoke or not. These details help the insurer get a basic idea about you.

  1. Get the value
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Once you have entered these details, the calculator will present you with the premium value that you will be required to pay towards your policy.

While the calculator will give you an idea about the premium, do keep in mind that it premium is not the only factor you should consider. You must also account for the sum assured that your policy offers.


This is how you can calculate your premium with the help of the term insurance premium calculator. You can get in touch with your insurance advisor to get an exact quote for your insurance policy.

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