Term Plan Calculator

Term insurance is pure life insurance that provides coverage for a specific period (term) at affordable premiums. If you pass away during the policy term, your nominee receives the sum assured (death benefit). If you survive the term, there's no maturity benefit. Term insurance is the most cost-effective way to secure high coverage amounts, making it ideal for income protection and family financial security.

Your term insurance coverage should be sufficient to: (1) Replace 10-15 years of your annual income, (2) Cover all outstanding loans (home loan, car loan, etc.), (3) Fund your family's living expenses for 10-20 years, (4) Cover future expenses like children's education. Our calculator uses multiple methods (HLV, expense-based, income multiple) to recommend appropriate coverage. Typically, coverage should be 10-15 times your annual income.

Buy term insurance as early as possible - ideally in your 20s or early 30s when premiums are lowest. Premiums increase significantly with age (3-5x higher after age 40) and health issues can make you uninsurable. Locking in low premiums early ensures affordable protection for the entire term. If you have dependents or financial obligations, term insurance is essential regardless of age.

Term insurance is pure protection with no maturity value - you pay premiums for coverage, and if you survive, you get nothing. Whole life and ULIP policies combine insurance with investment/savings, but charge 5-10x higher premiums for the same coverage. For most people, term insurance for protection + mutual funds for wealth creation is more cost-effective and provides better returns than bundled policies.

Term insurance premiums depend on: (1) Age - older age = higher premium, (2) Sum assured - higher coverage = higher premium (but per-unit cost decreases), (3) Policy term - longer terms have higher premiums, (4) Health status - pre-existing conditions increase premiums, (5) Lifestyle factors - smoking, hazardous occupations increase premiums, (6) Insurer - different companies have different pricing. Premiums are typically level (same throughout the term) or increasing.

Term insurance premiums offer flexible payment options to suit your cash flow: (1) Monthly payments - Available for your convenience, making it easier to manage insurance expenses alongside your monthly budget, (2) Quarterly payments - Every 3 months, (3) Semi-annually - Every 6 months, (4) Annually - Cheapest option with 2-3% discount, recommended for maximum savings. While annual payment is most economical, monthly payment option provides flexibility for those who prefer smaller, regular payments. Some insurers offer salary deduction or ECS (Electronic Clearing Service) for automatic monthly deductions. Always compare the total annual cost across payment modes before choosing.

Yes, term insurance premiums qualify for tax deduction under Section 80C up to ₹1.5 lakh per year (combined with other eligible investments like ELSS, PPF, etc.). Additionally, the death benefit received by nominees is tax-free under Section 10(10D) of the Income Tax Act. However, there's no maturity benefit or tax benefit on survival.

Your term insurance should ideally last until your retirement age or until your financial obligations are met (loans repaid, children financially independent, etc.). For most people, 25-30 year terms work well. Buy longer terms when you're young to lock in low premiums. The term should cover your peak earning years and critical financial responsibilities.

Important riders to consider: (1) Critical Illness Rider - pays lump sum on diagnosis of specified illnesses (cancer, heart attack, etc.), (2) Accidental Death Benefit - additional coverage for accidental death, (3) Permanent Disability Rider - coverage for total permanent disability, (4) Waiver of Premium - waives future premiums if disabled. Riders increase premiums but provide additional protection. Evaluate based on your needs and budget.

Some term policies offer coverage increase options (at premium increase) or allow you to buy additional coverage. However, new coverage will be at your current age's premium rates, which are much higher. It's better to buy adequate coverage initially rather than trying to increase later. If needed, you can buy an additional term policy, but coordinating multiple policies can be complex.

Most term policies have a grace period (usually 15-30 days) to pay missed premiums without policy lapse. If you don't pay within the grace period, the policy lapses and coverage ends. Some policies offer revival within 2-5 years, but with penalties and medical checks. Set up auto-debit or reminders to avoid missing payments. Consider annual payment mode to reduce payment frequency.

Yes, homemakers and working women should also have term insurance. While they may not earn income, they provide valuable services (childcare, house management) that would cost significant money to replace. Coverage for homemakers should cover: cost of hiring help, childcare expenses, and contribution to family expenses. Working women need coverage similar to men - typically 10-15x annual income. Premiums for women are often 10-20% lower than men for the same coverage.