Why is return of premium so much more expensive?

Because it is a savings product bundled with insurance. You pay several times the pure term rate and get the money back without interest, which is worse than buying term and investing the difference.

How much cover do I need?

Enough to replace your income for the years your dependants need it, plus any debt they would inherit, less what you already hold. Ten to fifteen times income is the usual shorthand.

Insurancelife

Life Insurance Premium Estimator

Term life premium estimate and the cover you actually need. Smoking roughly doubles the premium, and pure term costs a fraction of any policy that returns your premiums, because return of premium is a savings product with a poor return attached to the insurance.

Also called: term insurance calculator, life cover calculator.

Estimated annual premium

₹11,613

₹11,613 a year for 1,00,00,000 of cover over 30 years, or ₹968 a month. That is ₹116 per lakh of cover. Based on your income and dependants you need about ₹3,40,00,000, so you are under-insured by ₹2,40,00,000. Non-smoker rates apply. Declaring smoking honestly matters: a false declaration can void the claim.

Monthly premium

₹968

Premium per lakh of cover

₹116

Cover you need

₹3,40,00,000

Gap against what you need

₹2,40,00,000

Total premiums over the term

₹3,48,392

Premium as a share of income

0.77%

Direction of the gap

under-insured

On smoking

Non-smoker rates apply. Declaring smoking honestly matters: a false declaration can void the claim.

On the estimate

This is an estimate from a rate table, not a quote. Underwriting sees your history and prices accordingly.

How this is calculated

An estimate, not an offer or a guarantee. Projected returns assume the rate you entered holds for the whole term, which no market does.

Method and background

This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for India change on a published schedule; the effective date is shown on every rule-based tool.

How this is calculated

Premium rises steeply with age and with term, and smoking status is the single largest rating factor after age, typically doubling the rate. The cover requirement is computed separately: enough to replace income for the years dependants need it plus the debt they would otherwise inherit, less cover you already hold. Return of premium policies charge several times the pure term rate and give the money back at the end without interest, which is a poor return dressed as a refund.

the cover requirement replaces income for the years dependants need it, and clears the debt they would inherit

y: Years of support

Worked examples

Each of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.

a 35 year old non-smoker

Age: 35
Cover required: ₹1,00,00,000
Policy term: 30
Sex: Male
Smoker: No
Policy type: Pure term
Annual income: ₹15,00,000
Existing cover: ₹0
Outstanding debt: ₹40,00,000
Years dependants need support: 20

Estimated annual premium₹11,613

15L x 20 plus 40L of debt

Open this example

return of premium costs several times more

Age: 35
Cover required: ₹1,00,00,000
Policy term: 30
Sex: Male
Smoker: No
Policy type: Term with return of premium
Annual income: ₹15,00,000
Existing cover: ₹0
Outstanding debt: ₹40,00,000
Years dependants need support: 20

Estimated annual premium₹37,162

boundary: the cover need is unchanged; only the premium multiplies

Open this example

Method and limits

What it assumes

Standard health with no loading. Any medical condition changes this substantially.

What it deliberately does not model

Underwriting prices your actual medical history, which this cannot see.
Rates vary substantially between insurers for identical risk.
The cover recommendation is a rule of thumb, not a financial plan.

Formula version 1.0.0 · definition 1.0.0 · India · Report a problem with this calculator

Frequently asked questions

Why is return of premium so much more expensive?: Because it is a savings product bundled with insurance. You pay several times the pure term rate and get the money back without interest, which is worse than buying term and investing the difference.
How much cover do I need?: Enough to replace your income for the years your dependants need it, plus any debt they would inherit, less what you already hold. Ten to fifteen times income is the usual shorthand.