Premium Calculator: Analyzing Before Investing

Insurance ensures a financial security of your future and gives a great deal of peace in the knowledge that your near and dear ones are well covered. Though most investors agree that insurance is a need, at the same time they also find it challenging to determine whether they are taking the right policy. And, if they are taking the right policy, are the calculations pertaining to life cover and premium amount are correct and accurate as stated by the advisor?

To help investors overcome this dilemma, most insurance companies have introduced online premium calculators on their websites. This makes it easier for the insurance buyers make informed and customized decisions.

What is a Premium Calculator?

A premium calculator is a tool that is based on logical matrix considering various factors that differ based on the insurance one is seeking. You are usually required to choose an insurance plan of your choice; fill in your personal details like date of birth, gender, current income, annual expenses and contact details; and the premium calculator generates the premium amount.

Premium calculation is usually the first step of taking insurance and instills confidence in the investors regarding their decision to invest in an insurance policy.

Here are five reasons as to why and how premium calculators can help you to analyze your insurance needs before taking the final investment decision.

1. Crisp numbers
The best advantage of premium calculators is their objectivity. You feed in solid numbers and it gives out an actionable result in the form of numbers. What works further in favor of these calculators is the fact that there is no scope for bias and the computations are purely a result of an indisputable mathematical logic.

For instance, let’s say you want to buy Guaranteed Wealth Protector from ICICI Prudential. You want to know how much premium you will have to pay. All you need to do is visit the website of ICICI Prudential and generate an online quote.

premium calculators premium calculators

2. Ease of purchase
With the growing popularity of online insurance plans, premium calculators are becoming a favored tool for the online insurance buyers. There is no need to consult and engage an advisor unless you have some very specific requirement and queries. The moment you are satisfied with the results generated by a premium calculator, you can click the ‘buy’ button and invest in an insurance plan instantly!

3. Reliability and accuracy of quote
Since you purchase a policy directly and online from the insurance provider, it eliminates the human errors that could possibly creep in if purchased from advisors. A premium calculator gives the power of conviction to the investor when it comes to calculating the right cover and premium amount.

4. Premium under special riders
Premium calculators are quite exhaustive in nature and insurance companies have tried their best to build-in all important features and factors in these calculators. If you are availing riders like accidental death benefit, critical illness or income benefits rider, then you can mention them in the matrix so that the calculator considers it for computing your coverage amount.

The following screenshot gives an inside peek into how a rider is added while considering the premium amount of life cover.

Premium under special riders

5. Facilitates long-term investment planning
Premium calculators can be great facilitators for long-term investment planning. They can help you in determining the amount of tax planning, life cover, retirement planning, child education and marriage and portfolio management. This simple exercise will help you ensure plan much better in advance.

Facilitates long-term investment planning

With one of the greatest challenges in buying insurance taken care of by these calculators, investors can now make a better and expeditious decision while buying insurance. A simple mantra for calculators summarized in three words- explores, analyze and invest.

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