Term Insurance Calculator
How much term insurance cover should you have? A thumb rule says 20 times of your annual income. While this can be a guiding factor, it might not simply work for everyone. Don’t worry. We have made it easy for you. Simply provide us with a few other details and our term insurance calculator will calculate it for you.
Your Age
Enter your age (in years)
18 years
80 years
Protection Duration
Enter the age till which you want your coverage to last (in years)
18 years
80 years
The plan should ideally last untill your dependents need financial assistant (typically 60-70). Anything beyound this age may be need less and expensive.
Monthly Expenses (
)
Enter Your average monthly expense
Do not include EMI's & investments in expenses.
Outstanding Loans ()
Enter any unsecured outstanding loans
Disclaimer: Insurers set an upper limit to your coverage based on your income and education.
Get the right cover in just a few clicks!
Determining the ideal term insurance cover has never been easier. Enter your details, click "Calculate", and receive a personalized recommendation to meet your needs!
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10000 Monthly Expenses
10000/Month
108333/Month
What is a Term Insurance Calculator?
What is the ideal term insurance cover amount for you?
Finding the ideal term insurance cover you need can be a daunting task.
A good way to do this would be to think of your term insurance cover as a tool which will take care of all your family’s expenses in your absence. This method of calculating the cover amount for you is called Expense Replacement Method.
Arrive at the current average monthly expenses of your family. This is the amount your term insurance cover should be able to provide every month to your family in your absence so that your loved ones can maintain the same lifestyle.
But this amount will increase every year due to inflation. So you need to take inflation into consideration and project this amount till the year you think your family needs protection.
In the unfortunate event of your early demise, your family will get a huge lumpsum benefit from your term insurance policy. They can keep it in a normal bank account which would provide them some interest on the principal amount. Both the interest and the principal amount combined together should be enough to cover your family’s expenses till they become financially independent.
Consider this interest earned and discount the monthly expenses to arrive at their present values. Adding all these present values will give you a lumpsum amount which should be good enough to cover your family’s future expenses.
If you have any outstanding loans such as a home loan or a car loan, your family will have the burden to pay it off if you pass away. So you also need to add this outstanding liability to arrive at your ideal cover amount.
Still confusing! How are you going to do it all by yourself?
Don’t worry. We have made it easy for you.
Enter your details and click ‘Calculate’ and receive personalised recommendation on your cover amount.
Frequently Asked Questions
What is the purpose of a Term Insurance Calculator?
A Term Insurance Calculator helps you determine the ideal term insurance coverage you should have to financially protect your family in case of your absence.
How does the Expense Replacement Method work?
This method estimates the amount of money your family needs to maintain their current lifestyle and support future financial commitments in case you are not there to bring home your monthly income. It factors in your current monthly h expenses, inflation, and potential investment returns.
Why should I account for inflation?
Inflation increases the cost of living over time, so including it ensures your family receives adequate financial support in the future.
How does the calculator factor in my loans?
You can input any outstanding liabilities, like a home or car loan, which the calculator adds to your required coverage amount.
Is the Term Insurance Calculator accurate?
What if my expenses change over time?
It’s wise to periodically review and update your term insurance coverage to align with changing expenses and life circumstances.
Can the calculator help with planning for my children's education?
Yes, you can factor in future education costs to ensure your family has the resources for major life expenses. For more clarity, consult with a good insurance advisor. Book a call with us now.
How do I calculate the interest earned on the lump sum?
The calculator estimates the interest your family might earn if they invest the insurance payout, helping to project future financial support.
Should I include my spouse's income in the calculation?
If your spouse works and earns an income, you may adjust your coverage to reflect the combined household financial needs.
How often should I use the Term Insurance Calculator?
Use the calculator when you buy a new term insurance plan. Or, use it to review your existing cover after major life events such as marriage, having children, or taking on new financial obligations.
Does the calculator consider medical expenses?
Future medical requirements and associated expenses are difficult to project. It is wise to buy a robust health insurance plan that takes care of your family’s unexpected medical expenses. If you want to discuss your health insurance requirements with a good insurance advisor, Book a call with us now.
Is using this Term Insurance Calculator free?
Yes, this Term Insurance Calculator is completely free to use and provides quick, personalised recommendations.
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