Calculate term premium estimates using mortality, discounting, and fees. Compare annual and single premiums quickly. Turn survival assumptions into transparent insurance pricing results easily.
| Age | Term | Sum Assured | Mortality Rate | Discount Rate | Annual Fee | Mode | Gross Annual Premium | Monthly Premium |
|---|---|---|---|---|---|---|---|---|
| 35 | 20 | 500000 | 0.60% | 5.00% | 25 | Monthly | 2882.14 | 247.38 |
| 40 | 15 | 300000 | 0.85% | 4.50% | 25 | Monthly | 2465.19 | 211.60 |
| 50 | 10 | 200000 | 1.40% | 4.00% | 25 | Monthly | 2717.31 | 233.24 |
Pure term insurance values the death benefit during a limited term. This page uses a constant annual mortality assumption for a practical premium estimate.
Discount factor: v = 1 / (1 + i)
Death probability in year t: ((1 - q)t - 1) × q
Expected present value of benefit: Sum Assured × Σ [((1 - q)t - 1) × q × vt]
Premium annuity factor: Σ [((1 - q)t - 1) × vt - 1]
Net annual premium: Expected Present Value of Benefit ÷ Premium Annuity Factor
Gross annual premium: Net Annual Premium + Annual Fee
Gross single premium: Net Single Premium + Initial Fee
Modal premium: (Gross Annual Premium ÷ Payments per Year) × (1 + Modal Loading)
Pure term insurance provides protection for a fixed period. It pays only if death occurs during that term. There is no savings component. That makes the premium easier to model. It also makes assumptions very important. A premium calculator helps you test those assumptions quickly.
This calculator focuses on core actuarial statistics. It uses mortality, survival, discounting, and expense loading. These inputs shape the expected cost of the policy. The result is useful for students, analysts, and planners who want a structured estimate.
The model assumes one constant annual mortality rate. It applies that probability across each policy year. First, it estimates the chance of surviving to the start of a year. Then it estimates the chance of death during that year. Each expected claim is discounted back to the present. That creates the expected present value of benefits.
The calculator also builds a premium annuity factor. This factor represents expected premium-paying opportunities while the insured remains alive. Dividing the present value of benefits by that factor gives a net annual premium. Fees and modal loading then convert that value into more practical gross premiums.
Review the net single premium first. It shows the present value of expected claims before fees. Next, compare the gross annual premium and the selected modal premium. These values show how payment frequency and loadings affect affordability. The death probability during term and survival probability to term end also help explain the result.
Use the year-by-year projection for deeper analysis. It reveals how survival, death probability, and discounting interact over time. That makes the calculator helpful for coursework, pricing exercises, and sensitivity testing.
It is the price paid for life cover that lasts for a fixed term only. The policy pays a death benefit during the term and usually has no maturity value.
Mortality rate drives the expected chance of claim payment. A higher rate raises the expected loss cost, which usually increases both single and annual premium estimates.
Net single premium is the present value of expected death benefits before fees and loading. It is a base actuarial value rather than a final market quote.
The insurer does not expect every policy to claim during the term. Premiums reflect expected loss, time value of money, and survival-adjusted payment patterns, not the full benefit amount.
No. This is an educational and analytical estimate. Real insurers use underwriting, age bands, medical data, distribution costs, profit targets, and more detailed mortality tables.
The discount rate converts future expected claims into present value. A higher discount rate usually lowers the present value of benefits and can reduce the estimated premium.
Fees capture expenses beyond pure risk cost. Modal loading adjusts for more frequent payments, since monthly or quarterly collections often cost more than annual collection.
It is useful for actuarial students, finance learners, insurance researchers, and anyone comparing how mortality, discounting, and payment mode affect pure term premium estimates.
Important Note: All the Calculators listed in this site are for educational purpose only and we do not guarentee the accuracy of results. Please do consult with other sources as well.