1. What is Life Insurance Premium?

The life insurance premium is the amount you pay to the insurance company to keep your policy active. It's calculated based on the sum assured (death benefit) and the rate per thousand dollars of coverage.

2. How Does the Calculator Work?

The calculator uses the premium formula:

Where:

• \( Sum\ Assured \) — The death benefit amount in dollars
• \( Rate \) — The cost per thousand dollars of coverage

Explanation: The premium is directly proportional to both the sum assured and the rate. Higher coverage amounts or higher rates result in higher premiums.

3. Importance of Premium Calculation

Details: Accurate premium calculation helps in financial planning and ensures you get adequate coverage at an affordable price. It allows comparison between different insurance policies.

4. Using the Calculator

Tips: Enter the desired sum assured in dollars and the rate per thousand dollars. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What factors affect the rate per thousand?
A: Rates depend on age, health, lifestyle, policy type, and term length. Younger, healthier individuals typically get lower rates.

Q2: Is this calculation for term or whole life insurance?
A: This basic calculation applies to both, though whole life policies may have additional cost components.

Q3: How often are premiums paid?
A: Most commonly monthly or annually, though this calculator shows the total premium amount regardless of payment frequency.

Q4: Are there additional fees beyond the premium?
A: Some policies may have policy fees or riders that add to the cost beyond the basic premium calculation.

Q5: How accurate is this calculator?
A: It provides a basic estimate. Actual premiums may vary based on underwriting results and specific policy features.