Enter the age of the insured.
Enter the desired coverage amount.
History:

Explanation

What is Critical Illness Insurance?

Critical illness insurance is a type of insurance policy that provides a lump-sum payment to the insured upon diagnosis of a specified critical illness. This financial support can help cover medical expenses, lost income, or other costs associated with the illness.

How to Use the Cost of Critical Illness Insurance Calculator?

The calculator estimates the premium for critical illness insurance based on several input factors:

  1. Age of Insured: The age of the person being insured. Generally, younger individuals may have lower premiums.
  2. Gender: Gender can influence the cost of insurance due to varying health risks.
  3. Health Status: Pre-existing health conditions can affect the premium. It’s important to provide accurate information.
  4. Coverage Amount: The total amount of insurance coverage desired. Higher coverage typically results in higher premiums.
  5. Policy Term: The duration for which the insurance policy will be active, usually measured in years.
  6. Insurance Type: Whether the policy is for an individual or a family.
  7. Selected Critical Illnesses: Specific illnesses covered by the policy, such as cancer or heart attack.

Formula for Calculating Insurance Premium

The estimated premium can be calculated using the following formula:

Estimated Premium (P):

§§ P = \left( \frac{Coverage\ Amount}{1000} \right) \times (Age \times 0.5) §§

where:

  • § P § — estimated premium
  • § Coverage Amount § — desired coverage amount in dollars
  • § Age § — age of the insured in years

Example Calculation

  • Age of Insured: 30 years
  • Coverage Amount: $100,000

Using the formula:

§§ P = \left( \frac{100000}{1000} \right) \times (30 \times 0.5) = 1500 \text{ (Estimated Premium)} §§

When to Use the Cost of Critical Illness Insurance Calculator?

  1. Financial Planning: To estimate the cost of critical illness insurance as part of your overall financial strategy.
  2. Insurance Comparison: To compare different insurance policies based on premiums calculated for various scenarios.
  3. Budgeting: To determine how much you need to allocate for insurance premiums in your monthly or yearly budget.
  4. Health Assessment: To understand how your health status and age can impact your insurance costs.

Practical Examples

  • Individual Planning: A 40-year-old individual considering critical illness insurance can use the calculator to estimate their premium based on their health status and desired coverage.
  • Family Coverage: A family looking to secure coverage for multiple members can input different ages and health statuses to find the best policy options.
  • Insurance Agents: Agents can use the calculator to provide clients with quick estimates based on their specific needs and circumstances.

Definitions of Key Terms

  • Premium: The amount paid for an insurance policy, typically on a monthly or annual basis.
  • Coverage Amount: The total amount of money that the insurance company will pay out in the event of a claim.
  • Policy Term: The length of time that the insurance policy is in effect.
  • Critical Illness: A serious health condition that can significantly impact a person’s life and finances, such as cancer, heart attack, or stroke.

Use the calculator above to input different values and see how the estimated premium changes dynamically. The results will help you make informed decisions regarding your critical illness insurance needs.