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Empowering Financial Planning: How To Use A Term Insurance Calculator For Informed Life Insurance Decisions

In a fast-paced life with uncertainties, Term Life Insurance offers a much-needed safety net

Empowering Financial Planning: How To Use A Term Insurance Calculator For Informed Life Insurance Decisions

With the rising cost of living and high inflationary expenses, financial planning has become increasingly essential to manage finances and achieve life goals. And, Life Insurance, a significant part of financial planning, helps preserve funds not just during your lifetime but also beyond. Notably, it guarantees a payout to the nominees if the insured person dies while the policy has been in effect.

In this fast-paced life with uncertainties, Term Life Insurance offers the much-needed safety net. Read on to learn about term insurance, its benefits and premium calculator.

Term Life Insurance and its Benefits

Term Life Insurance or term insurance, a type of Life Insurance, offers coverage for a specific time period. It is a low-cost Life Insurance plan that provides financial compensation to your dependent family members after your demise. Notably, the policy term ranges between 5 and 40 years in India.

Besides, Term Life Insurance offers the following benefits:

  • Affordable Premiums: Term insurance comes with a high sum assured at affordable premiums. Notably, their premiums are amongst the lowest when compared to other traditional Life Insurance plans.
  • Policy Customisation: As per his/her needs and budget, a policyholder can choose the policy term, amount and any extra benefits.
  • Claim Settlement Assurance: If your policy has been in force for three years or more, then you can be certain of claim settlement.
  • Income Tax Benefits: Term insurance plans provide tax benefits, including:
    - Premium payments of up to Rs 1.5 lakh for yourself, spouse and children are eligible for tax deductions under the Section 80C of the Income Tax Act (ITA).
    - If your term plan features any add-on, then you can avail a maximum tax deduction of Rs 25,000 on its premium payment.
    - The maturity benefits become tax-free under the Section 10(10D) in case of the unfortunate demise of the policyholder.

It is to be noted that the tax benefits on Life Insurance plans are available only under the Old Tax Regime.

Term Insurance Calculator and its Advantages

It is imperative to buy the right term insurance policy that meets your requirements. And, term insurance calculator is an online tool that helps to gauge the premium amount that one needs to pay in order to avail the benefits of the policy. Not only this, it also helps to compare different policies and zero in on the Term Life Insurance plan that safeguards the family's interest.

Before buying an insurance plan, it is vital to ensure that it is sufficient to cover your family's financial needs in case of an emergency and the premium fits your budget well.

A term insurance calculator offers the estimated premium based on the following factors:

  • Coverage Amount: It is the amount that will be given to beneficiaries in case of the untimely death of the policyholder. It is suggested that the coverage amount should be a minimum of 10-15 times your annual salary.
  • Policy Term: It represents the period of time for which the plan will offer coverage.
  • Add-ons: Opting for riders can further enhance coverage and other benefits. But, this comes with an extra cost.

How to Use a Term Insurance Calculator?

Following are the details, a term insurance calculator user needs in order to get an estimated amount of premium:

  • Age
  • Gender
  • Date of birth
  • Duration of the policy
  • Sum desired
  • Annual income
  • Anticipated years of working
  • Anticipated personal expenses
  • Estimated annual increase in income

Upon entering all the details, the calculator will analyse your data and suggest the premium you will be required to pay against it.


To secure your future, it is important to take charge of your finances. One must aim at creating a fund for goal fulfilment through different investment avenues like Life Insurance or Term Life Insurance. This will help your loved ones deal with financial stress in your absence. So, use term insurance calculator by ACKO and buy a term life insurance plan soon to empower your financial planning.

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