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AED 1 million life cover starting @50/month
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A breadwinner’s sudden demise or disability can jar a family emotionally and financially. That is why you need to have a term insurance plan in place to be able to address the unpredictable in life. With all the leading insurance providers offering term insurance plans, you can be assured that your family’s needs will be taken care of in your absence. However, as the exact calculation of your term insurance premium may prove tedious. For this you can use a term insurance calculator. There are several factors involved in the calculation of term insurance premiums and using a term insurance calculator for the same can make the job a lot easier. To make this whole process a little easy for you, we’ve compiled a list of everything you should know about term insurance calculator UAE.

What is Term Insurance Premium?

With a term insurance plan, an earning individual can ensure that a certain sum will be provided to their family in case of their demise. Such a plan usually requires the applicant to complete a medical test, although the requirement may differ for each provider. The insurance buyer is required to pay a monthly or annual premium in exchange for this protection.

It should be noted that the assured sum is provided only if the insured individual passes away during the tenure of the plan (and not after the plan’s duration). Consequently, one should assess all the aspects of a term insurance plan before getting one. With the premium being a key aspect of the, one can have a clear idea about the same with a term insurance calculator also known as a term insurance premium calculator.

Term Insurance Premium Calculation

While the desired sum assured is the central aspect regarding term insurance premium, several other factors like the applicant’s age and medical conditions, monthly earnings etc. also play a role in term insurance premium calculation.

While the impact of the subjective factors in the above-mentioned list is difficult to gauge, one can always use a term insurance premium calculator and have an approximate idea about the applicable premium. With several options for term insurance calculator available online, you can easily deploy a term insurance premium calculator UAE for calculative purposes.

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Before moving on to the steps involved, let’s have a quick look at the key benefit of using a term life insurance calculator online.

Benefits of Term Insurance Calculator in UAE

With the eminent banks and insurance providers in the UAE possessing a well-functioning term insurance calculator, using one for the calculation can provide a seamless experience. Given below are some more benefits of using the term insurance policy premium calculator in the UAE.

  • Convenient Calculation: As described previously, several factors are involved in the calculation of insurance premiums like age, medical history, employment status and income, and so on. Incorporating a vast number of factors into a calculation can often prove challenging. However, with a term insurance calculator, you can simply enter the required details and have all the relevant information on your screen. The increased availability of term life insurance calculator online has ensured access to this tool for everyone.
  • Enhanced Information: Exploring and comparing the best term insurance plans in the UAE is necessary to obtain the best plan for yourself. However, making comparisons without adequate data may not prove fruitful. With tools like the term insurance plan premium calculator available, you can have instant access to crucial data. This allows you to make detailed comparisons and get the most suitable plan.

How to Use Term Insurance Calculator for Premium Calculation?

Unlike manual calculation, where you will be required to perform tedious calculations on a document or paper, a term insurance premium calculator will allow you to simply make a few clicks and get the result instantly.

You can easily discover a term insurance premium calculator UAE online at the websites of the leading financial services providers in the UAE. Once you find one, enter the details requested by the term insurance premium calculator like age, monthly salary, medical ailments (if any), desired assured sum etc. The calculator will then display all the data relevant for you regarding the process there.

Details Required for Term Insurance Premium Calculation

The following are some details generally asked for by a term insurance plan premium calculator in the UAE.

  • Age
  • Selected Plan
  • Desired Sum Assured
  • Medical Conditions (if any)
  • Family Information
  • Type of Occupation

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Factors Affecting Term Insurance Premium

The details mentioned above for the term insurance policy premium calculator are requested for a reason, with most banks and insurance providers structuring the applicable premium on these factors.

Elaborated below are the major factors affecting term insurance premiums:

  • Age: As a young person is expected to develop fewer ailments and diseases, there is a lesser risk of demise (and for the insurance provider to pay the assured sum). This aspect manifests in the premium, which is lower for young individuals applying for it.
  • Assured sum: A comparatively more straightforward equation, the premium of a term insurance plan is generally proportional to the assured sum you wish for. Consequently, a higher premium will apply if you want a higher coverage amount for your family. For this reason, it is recommended to properly gauge your familial needs to avoid planning for an assured sum that exceeds or falls below your requirements.
  • Selected tenure: Unlike the age factor, the selected tenure is generally inversely proportional to the premium amount. Thus, if you opt for long term insurance plans, the applicable premium will be significantly less than the shorter plans. 
  • Occupation: The type of employment of an individual plays a considerable role in the decision on the premium amount. Individuals like firefighters, medical personnel, construction workers, etc., are at an increased risk of injuries and death. If an applicant is employed in such a high-risk role, they will usually be charged a higher premium amount.
  • Medical conditions: Severe diseases and other medical conditions like high blood pressure, diabetes, and so on are indicative of higher mortality rate. Here, the term insurance premium is higher due to an increased risk of death. However, it should be remembered that other factors are also involved here.

    For instance, individuals engaged in smoking, drugs, and other harmful substances are considered high-risk individuals by the providers. Thus, they too are charged high premiums like patients with critical illnesses.

How to Reduce Term Insurance Premium?

It can be a cause of concern if you use a term insurance sum assured calculator and find out a high applicable premium. However, with a few simple steps, you can reduce your term insurance premium to a great extent.

  • Apply early: Among the easiest options available, you can apply for a term insurance plan as soon as you get a job with a stable income. With a term insurance plan, the motto of ‘the earlier the better’ is applicable.
  • Diligently select the assured sum: Before applying for a plan, you should consider the financial requirements of your family in the current time and future. For instance, if you find that AED 1 million will be sufficient for your family in your absence, you don’t need to opt for AED 5 million plans. Making such informed choices can lead to reduced insurance premiums.
  • Go for longer tenures: Besides ensuring financial protection for long durations, another benefit of obtaining term insurance plans for longer tenures is that the premiums are significantly reduced.
  • Maintain proper health: Engaging in regular exercise, maintaining a proper weight, and a healthy diet can help you lead a long life in a healthy manner. A similar result is obtained by avoiding smoking or drugs. Besides an improved life, these aspects also ensure a lower mortality risk, which translates into reduced term insurance premiums.

Term Insurance Renewal Premium

While being regular with standard premiums is beneficial, the same punctuality must be demonstrated with renewal. In case you fail to renew your term policy even after the end of the grace period (post-specified tenure), you will lose the coverage benefits for which you paid premiums for so long.

Some other benefits of renewing term insurance on time include similar or reduced premiums and a convenient renewal process. If you pay the term insurance renewal premium on time and assure the provider of your dedication to improving health, you may have a chance of reducing the premium. On the other hand, if you fail to renew beyond a certain period, you might end up incurring even higher premiums than your previous ones.

With multiple options available for term insurance premium calculator in UAE, you can always utilise one and get the required information for making an informed choice. To know more about such calculators and other term insurance-related facts, have a look at some commonly asked questions below.

FAQs

Q1. How is term insurance calculated?

Ans: The term insurance is calculated on the company’s part as per the plan selected by the applicant and the latter’s characteristics like age, health, income, etc. An applicant, on the other hand, can have the product of their annual income and years left for retirement as their required term insurance amount.

Q2. What is the best age to take term insurance?

Ans: With term insurance, the general rule of ‘the earlier the better’ applies. The best age to take term insurance is, thus, the one right when you find a stable income.

Q3. Which term policy is best?

Ans: One cannot generalise any term insurance policy as the best one, with the best term policy for an individual depending on their requirements as well as financial conditions.

Q4. Which death is not covered in term insurance?  

Ans: Generally, deaths occurring as a result of drug consumption, participation in illegal activities, and adventure sports are among the ones not covered by term insurance. However, individuals with regular participation in adventure sports may opt for an add-on that will provide cover even in case of adventure sports-related demise. One should verify the availability of such an add-on with their insurance provider before selecting a plan.

Q5. Is Covid covered in term insurance?

Ans: While governments across several nations have directed insurance providers to include Covid-19 related deaths in term insurance plans, its actual inclusion has varied significantly. Consequently, it is advised to enquire with the insurance provider whether Covid-19 deaths are covered in a term insurance plan.

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