How It Works

Enter Basic Details: Age, gender, smoking habits, and income.

Select Coverage Amount: Choose the sum insured and policy duration.

Add Riders: Optional benefits like critical illness or accidental coverage.

View Premium Estimate: The calculator provides an estimated premium based on inputs.

Who Determines an Insurance Premium?

While insurance companies develop their pricing models and rates, they must be followed by the regulations set by insurance regulators in each jurisdiction. These regulations ensure fairness, prevent discriminatory practices and maintain solvency in the insurance market.

These regulators ensure:

Fairness: Prevents discrimination based on the factors like age or gender.
Solvency: Ensures the companies have enough amount of funds to pay future claims.
Transparency: Requires companies to disclose the pricing factors and methods too.

How Insurance Premiums are Calculated?

Several factors influence your premium amount, determining your premium is like composing a symphony, where every factor plays its part :

• Type of Insurance: Life, health, auto, or home insurance each carries different risk profiles and pricing structures. From the delicate notes of life insurance (age, health) to the bold rhythms of auto insurance (driving history, vehicle type), every type carries its risk profile as well as pricing structure.

• Coverage Level: The higher the coverage amount, the higher the premium. Here the scenario is that the higher the coverage amount you select, the louder the premium's melody. Think of it as amplifying your financial protection by accelerating coverage amount, naturally increasing the cost.

• Deductible: A higher deductible usually lowers your premium. This acts as a silent pause before the insurance kicks in. Selecting the higher deductible lowers your premium but means you'll need to take on more financial responsibility initially in case of a claim in this case.

• Risk Factors: Age, health, driving history, property location, etc., all play a role in assessing your risk and premium. These factors are like individual instruments, each contributing to the overall risk assessment and impacting your premium accordingly.

• Policy Details: Term length, additional riders, and other policy specifics can impact the cost effectively. It is like gap coverage for cars, and other specifics can act as subtle modulations, fine-tuning the final cost-efficiently.