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The purpose of insurance is to secure your family by providing substantial compensation in case of your untimely demise.
In most Indian households, saving money is an important lesson that is taught from a young age. So, when you become financially independent, you look for opportunities to save more and reduce the burden on the income. However, when it comes to major financial decisions, such as buying life insurance, it might not be the same, and cost is not the only factor you should consider.
As crucial as it is to buy life insurance within your financial capabilities, it is important to understand how the price of insurance works. When you are looking for a suitable insurance plan, an insurance calculator can make things easier for you to determine the right cost of the policy. Most people make the mistake of choosing the cheapest plan available so that their premium liabilities are low.
However, the purpose of insurance is to secure your family by providing substantial compensation in case of your untimely demise. The cheapest insurance plan may leave your family with inadequate cover and, ultimately, financially troubled. An insurance calculator is a tool that specifically addresses this concern of policy buyers.
You can use an insurance calculator to find the most suitable cover amount, premium rates depending on your particular needs. It will also help ensure that the cost of insurance is within your financial limits and sufficient to take care of your family’s needs.
Let’s look at some important factors that should be considered when using an insurance calculator:
The policy period refers to the duration for which the insurance plan covers the policyholder. Life insurance is a long-term instrument that can offer coverage for the whole life, in some cases. But, the rate of premium will fluctuate depending on the policy period you choose. Generally, it is advisable to consider your age, dependents, financial liabilities, goals, and income to choose a policy period.
When you fill in the personal information in an insurance calculator, it gives you an estimate of the sum assured and premium amount for a particular policy period. You can change the policy period in the insurance premium calculator to see how it would impact the cost for you.
It is crucial to note here that if you choose a policy period too short because of the lower prices, the insurance plan might fail to serve its purpose. On the other hand, an excessively long policy period will lead to greater expenses. Simply put, the right policy period depends on each person’s financial profile, which is unique. Hence, it makes sense to use an insurance calculator and estimate the right policy period for your family.
When you decide to buy life insurance, the next important step is to estimate the right sum assured. It is the amount payable to your loved ones in case of an eventuality; therefore, it should be a careful decision. Most insurance providers have an insurance calculator on their website, which you can use to calculate the sum assured aligning with your insurance requirements.
Some things to remember when choosing the right sum assured with an insurance calculator are:
As the financial needs of people are evolving with time, different types of insurance products with innovative features have become popular. Depending on the insurance provider, the perks and benefits of the insurance plan may vary. As a consequence, there is a difference in the pricing of policies as well.
So, when you are using an insurance calculator to estimate the price of the policy, you can also compare the additional features and the resulting cost. For instance, insurance providers may offer multiple riders with their base plan to enhance the coverage of the policy. However, the benefits and the price of the rider may not be the same.
Make sure you are aware of your options to use the insurance calculator to your advantage. Options of add-on riders like critical illness, waiver of premium, accidental death & disability are some common additions. As per the IRDAI annual report for 2019-20, 4.31 lakh health insurance riders were issued with new life insurance products.
Life insurance products are excellent tax-saving tools. Once you have chosen the sum assured, premium rates, policy period with an insurance calculator, you can review the annual tax benefits to plan your expenses efficiently.
The tax benefits include deduction on the annual life insurance premiums paid under Section 80C of the Income Tax Act, 1961. Additionally, the insurance pay-out will be tax-exempt under Section 10 (10)D of the Income Tax Act.
Picture Credit: Shutterstock
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UP Boards Topper Prachi Nigam was trolled on social media for her facial hair; our obsession with appearance is harsh on young minds.
Prachi Nigam’s photo has been doing the rounds on social media for the right reasons. Well, scratch that- I wish the above statement were true. This 15-year-old girl should ideally be revelling in her spectacular achievement of scoring a whopping 98.05% and topping her tenth-grade boards. But oddly enough, along with her marks, it’s something else that garners more attention – her facial hair.
While the trolls are driving themselves giddy by mocking this girl who hasn’t even completed her school yet, the ones who are taking her side are going one step ahead – they are sharing her photoshopped pictures, sans the facial hair, looking nothing less than a celebrity with captions saying – “Prachi Nigam, ten years later”.
Doctors have already diagnosed her with PCOD in their comments, based on photographic evidence. While we have names for people shamed for their weight – body shaming, for their skin colour- racism, for their age- age shaming, for being a female- sexism, this category of shaming where one faces criticism for their appearance has no name. With that, it also has zero shame attached to it.
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