How to Calculate Life Insurance Premium

What is a Life Insurance Premium?

The premium that you just need to pay for a life insurance cover to the insurance company, which depends on various factors like age total coverage (sum assured), your case history, gender, lifestyle, and job.

The premium for the identical life insurance cover amount will vary from insurer to insurer.

A life insurance policy may be a contract between an insurer and a policyholder.

To make the contract valid, a premium amount is paid by the policyholder at the time of shopping for the policy and later at agreed intervals of your time, reckoning on the frequency and mode of payment.

In most cases, the younger or a healthy person gets the plan At a lower premium whereas the older or the one who is unhealthy has got to pay much higher than that. Many factors are deciding the premium which is able to get below.

What is a life insurance premium Calculator?

A life insurance premium calculator is a calculator used to calculate the estimated premium value in line with your plan choices which can rely on plan type, sum assured, age, health history, tenure, etc.

Mortality and underwriting process

The process of underwriting determines your life insurance premium.

In the underwriting process, various factors are taken into consideration like your age, gender, occupation (whether or not you are related to the risky profession) lifestyle, policy tenure, any hereditary diseases within the family, and so on.

Apart from this, a life insurance premium is additionally calculated on an actuarial basis ( a mathematical and statistical method to assess risk in insurance) that considers the probability of death occurring at a specific age level

Expenses and profit margins

The premium amount varies for several insurers because the premium not only depends on the factors related to the policyholder but also on factors associated with the insurer that is the expenses incurred by the insurer in writing the policy. For life insurance plans the premiums may differ because insurers will have different cost structures, assessment of risk ad investment returns, although the factors used to determine premium.

Exigency element

Different factors are involved while calculating the life assurance premiums. One in all the minor contributors to the premium is contingency charges. For example, the number of claim settlements cannot be simply estimated that what percentage of claims an insurer will receive during the year truly not known.

How to Calculate Life Insurance Premium

there are many calculators available within the market but we are using LIC All In One Calc which is out there on Google Play Store. it gives plenty of options to the user to calculate the various plan premiums and also share the results, so let’s start calculating the life insurance premium.


Birthdate: 11/1/1995

Age: 27

Term: 25

Sum Assured: 1000000

◻ Term Rider

                 Term Rider S.A.


◻ Age Extra

◻ Required Medical Reports

◻ Tex Saved

                Tax Rate: 30%

◻ Total Approximate Paid Premium

◻ Maturity

◻ Maturity Settlement

                Year: 5


Calculate Life Insurance Premium here:


Benefits of life insurance calculator

A life insurance calculator helps us in many ones, we’ll be discussing a number of the benefits of a life insurance calculator as follows.

To Calculate the premium 

It helps us to calculate the accurate amount which you need to pay while buying a life insurance cover in order we can make good financial planning and get invested our money to satisfy our financial needs.

Compare plans

The next benefit is to compare different kinds of plans available within the market so that one can get a transparent idea to shop for the right plan and save the amount.

Less errors

Premium calculation is automated so that there are less chances to urge mistaken and choose for an accurate investment with a perfect plan.

Frequently Asked Questions

How to lower the Premium of the Policy?

The premium of the policy can be lowered by going for a high tenure, paying the premium annually, being healthy which might minimize the possibilities of death, and also by purchasing a policy at a young age.

Also Read: What is Endowment Plan?

What percent of GST is Included within the Premium?

18% of the GST is included within the premium of the plan.

What are the documents needed to purchase LIC Term Life Insurance Plan?

The documents required to purchase LIC Term Life Insurance Plan are as follows:

• Id Proof

• B.O.B Proof or Age Proof

• Address Proof

Leave a Comment