Getting your first paycheck is often exciting; the first instinct is what to do with it. Should you spend or save is another question that confuses young people. Irrespective of your decision, do not forget to get a life insurance plan to secure your life and future. However, it isn’t easy to understand the right coverage amount for your needs or age.
In this situation, a calculator can help you select a plan that fits your requirements and budget. Continue reading to learn more.
Table of Contents
Understanding Life Insurance
Life insurance, as the name implies, is a contract between you and your insurance company that provides coverage for your life. In the event of your untimely death, the nominee mentioned in your policy will get the sum assured from the insurance company. This amount will help your family cover expenses and your lost income.
Although everyone should get life insurance, the primary breadwinner must take it. The company pays the amount if you have made all the instalments as defined on time and as per the agreed tenure. There are different types of life insurance available, and in some policies, the assured amount is also given when the policy matures, offering safety and savings.
Since life insurance helps meet financial needs in difficult times, you must get the right coverage, which you can decide using a calculator.
What is a Life Insurance Calculator?
You may determine the premium you must pay for your insurance policy using an online calculator. It calculates the accurate premium amount using income, age, life stage, number of dependents, sum assured, financial obligations, etc. By altering the sum assured, you can determine the right coverage and premium amount for your life insurance policy.
Use different types of free calculators, such as a fixed deposit calculator and an insurance calculator, to decide the right amount to deduct from your salary for investment purposes.
Benefits of Life Insurance
Here are some benefits of life insurance:
- Financial Security
It is the most significant benefit of taking life insurance. The death benefit given to your nominee in case of your untimely demise is a safety net for your family.
Child’s Future Safety
Once you start to plan a family, you will need money to fund your children’s education. There are life insurance plans that can finance your child’s future and education.
3. Retirement Planning
In case your job doesn’t offer a pension provision, retirement planning is a must. Investing in life insurance annuity plans can provide regular income post-retirement.
4. Tax Benefits
Life insurance also offers tax advantages along with savings and peace of mind. Under Section 80c of the Indian Income Tax Act, the premium amount is eligible for tax deductions, reducing your tax burden.
Key Benefits of Using a Calculator for Life Insurance
Let’s look at some benefits of using a life insurance calculator before you plan to invest your first salary:
- Personalised Planning
Everybody’s financial needs are different, and therefore, an insurance calculator will help you personalise your plans according to your unique requirements. As you will be investing your first salary, the calculator will ensure your investment strategy is aligned with your goals.
- Budget-Friendly Approach
Different life insurances have various features, riders, and premium rates. Therefore, with the help of this calculator, you can strike a balance between your budget and coverage. You can adjust the amount and duration to find the spot that offers financial protection without a burden.
- Better Decision Making
Life insurance should not be taken in a hurry, and should be taken considering long-term consequences. With the help of this calculator, you can experiment with different conditions and scenarios to determine how these adjustments will impact your premium amount. Thus helping you make the right decision.
- Save Time and Efforts
An insurance calculator can help you save time by automatically calculating the amount rather than requiring you to do it manually. Additionally, using this calculator, you may evaluate various policies and determine which best suits your needs, saving you the time and effort required to phone agents and request estimates.
How to Use an Insurance Calculator?
You can use this calculator by following the steps below:
- Open the calculator.
- Enter the required information, such as name, phone number, age, occupation, etc.
- Click on agree and submit.
- You will see the different plans and choose the one you prefer.
- Enter details, such as life cover amount, premium payment tenure, frequency, etc.
- Check out the premium amount and adjust the above step to find the right cover and premium per your needs.
The fixed deposit calculator can be used in a similar way to determine the amount you need to pay to get an FD.
Conclusion
Remember that your first salary is not a simple milestone but the beginning of a secure financial future. Therefore, carefully choose investment options, such as life insurance, to use your salary wisely. Life insurance will protect your life and secure your family financially in case of your untimely death.