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Term Insurance Single Premium Formula:
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Term Insurance Single Premium is a one-time payment made for a term insurance policy that provides coverage for a specified period. It is calculated by multiplying the sum assured by the applicable rate.
The calculator uses the simple formula:
Where:
Explanation: This straightforward calculation determines the one-time premium payment required for the specified term insurance coverage.
Details: Accurate premium calculation is essential for insurance planning, budgeting, and ensuring adequate coverage for the specified term period.
Tips: Enter the sum assured in dollars and the rate as a decimal value. Both values must be positive numbers (sum assured > 0, rate ≥ 0).
Q1: What is sum assured in term insurance?
A: Sum assured is the guaranteed amount that will be paid to the beneficiary if the insured person dies during the policy term.
Q2: How is the rate determined for term insurance?
A: The rate is typically based on factors such as age, health condition, policy term, and the insurance company's pricing strategy.
Q3: What's the difference between single premium and regular premium?
A: Single premium requires one lump sum payment, while regular premium involves periodic payments (monthly, quarterly, or annually) throughout the policy term.
Q4: Are there any additional charges besides the premium?
A: Some policies may include additional charges such as policy fees, rider premiums, or administrative costs beyond the basic premium calculation.
Q5: Can I get a refund if I cancel a single premium policy?
A: Refund policies vary by insurance provider. Some may offer surrender value, while others may have limited or no refund options for single premium policies.