An Exhaustive Guide to Calculating Insurance Premium Like A Boss

Life is full of surprises, and not preparing for these eventualities at the right time will put you and your loved ones in financial turmoil. This is the reason you need to check out the best insurance plans not just to secure your family’s financial needs in your absence but also to save taxes in the process. 

However, if you are unsure about how to invest in term insurance, then you have come to the right place. 

When choosing a term insurance plan, you need to use the life insurance premium calculator to get the premium estimation. Apart from that, you also need to take other factors such as age, lifestyle habits, insurer’s claim settlement ratio, and income into account when choosing a policy.

Online term policy offered by reputed insurers such as Max Life Insurance allows you to review and compare the insurance plans before investing. You can use the life insurance premium calculator provided by these insurers at the time of policy selection to weigh the benefits with regards to premium cost-effectiveness. 

To decide what premium you must opt for, you need to get the accurate sum assured that you must take the inflation, your family’s needs, your liabilities, and debts into account. Ideally, the sum assured should be at least 15-20 times you an annual salary that will adequately cover the financial requirements of your dependents. 

By using an insurance policy calculator, you will be able to find the perfect balance between the sum assured and the premium you can afford. 

But first, let us understand what a premium calculator is and how it affects your policy quote. 

What is Term Insurance Premium Calculator? 

A life insurance premium calculator is an online tool that is used to determine the premium amount that you need to pay for your term life coverage. This automated process is quick, hassle-free, and seamless that helps you save time. What’s more? By calculating the premium with an online calculator, you can minimize the scope of human error, thereby getting an accurate quote. 

At the same time, a life insurance premium calculator enables you to regulate the sum that you would like your policy beneficiary to receive in case of your absence. 

With so many insurance providers and a wide range of insurance products in the market, the claim settlement ratio alone cannot help you choose the right plan and insurer. What you need is to thoroughly compare the policies and weigh them against each other as per premium amounts to make an informed decision. 

The insurance calculators simplify the process of policy comparison, thereby making it easier for you to purchase the right life insurance policy. 

Factors Affecting Insurance Premium Quote

Term insurance is a popular product in the insurance market. However, its premium is dependent on numerous factors, some of which are variable.

Let us discuss some of these factors to know how they impact your premium estimation calculation.  


The most important consideration when estimating your premium is your age. The younger you are, the cheaper your term insurance premium will be. 

Sum assured

Your premium amount is also influenced by the sum assured you choose. Therefore, it is crucial to assess your needs before estimating the sum assured. Underinsured policies will fail to meet the financial objectives of your loved ones. At the same time, over-insurance will make the policy unaffordable in the long run. 


If you are a woman, then you can avail discounts in the premium amount to get higher coverage for a lower premium. Since women have a different lifestyle, such as smoking habits and alcohol consumption, they can enjoy more significant benefits in terms of policy quotes. 

Policy term

The policy period should ideally be equivalent to your working years. The longer the working period, the lower your premiums will be. 

Premium Calculation Process

The life insurance premium calculator on insurance websites takes the necessary information from you and gives you an accurate quote to help you process your term insurance online. Here are the steps involved: 

  • Step1

If you are calculating your premium online, then you need to enter all the information such as age, coverage type, amount of coverage, and other personal details accurately to get an estimate. Once you enter the details, you need to hit the calculate button for the online policy calculator to give you a quote.

  • Step2

The policy calculator can also be used to customize the plan as per your preference and convenience. Choose the coverage period and policy tenure. 

  • Step3

Evaluate the rider benefits and add them to your policy to expand the coverage of your insurance. You can select riders such as critical illness or accidental death benefits to cover life’s uncertainties. Once you add the riders, your policy premium will be automatically updated.

  • Step 4

Once all the details have been entered, you can select the payment method to process the policy transaction. 

Alife insurance premium calculator helps you calculate the exact cover you will need and the total amount of premium that you may have to pay for it. Apart from selecting the right cover, this tool also helps you understand the cover duration. With the help of an insurance calculator, you will be able to choose the best deal and save money, too, all by yourself! 


Greg Trim

John is a small business blogger with a focus on technology and innovation. With over 7 years of experience covering the latest trends in the small business world, John has a reputation for being a knowledgeable, forward-thinking and tech-savvy blogger. He has a keen understanding of the intersection between technology and small business, and is able to explain the latest tools and strategies in a clear, relatable and actionable way for his readers. John has interviewed industry experts and covered major technology events such as the Consumer Electronics Show and the SXSW Interactive conference. He is also an active small business owner and entrepreneur, which gives him a unique perspective on the challenges and opportunities facing small business owners in the digital age. His blog is known for providing valuable insights and tips on how to leverage technology to grow and scale a small business.