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Calculate Installment Premium without Tax

Insurance premiums are a necessary evil. In order to protect your family or business from the financial burden of an accident, you have to pay for the insurance policy. Healthcare, car, home, and life insurance all require a premium payment before they can be offered as a service. They vary in price depending on where you live and what type of coverage you’re getting. However, that’s not all. Insurance premiums also contain a tax component.

This blog will help you understand how insurance premium works and how to calculate your installment premium without tax.



What is an Insurance Policy?

The insurance premium is the cost of an insurance policy. This is often installment-based, which means that the customer will be billed overtime for their policy. When the premium is collected, it becomes a source of income for the insurance firm. It also constitutes a liability because the insurer is required to pay coverage for claims filed against the policy. If there are any installments left unpaid on your individual or business account then they may result in the cancellation of your policy altogether!

How Insurance Premiums Are Determined?

One of the key decisions you’ll make when choosing an insurance policy is how to pay your premiums. This blog post will focus on installment premium payments without tax. There are many advantages to installment payments, including:

  1. Paying your monthly or semi-annual installments in advance can help spread out the cost of your premiums over time and reduce any sudden increases in costs due to inflation
  2. Your insurer may offer discounts for installment payments, which could save you money!


But what about taxes? You’re not responsible for paying tax on installment premiums if they’re paid before coverage starts. But once it does start, you’ll be responsible for paying both installments and installment taxes.

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Factors that determine your insurance premium:

  • Coverage type
  • Your age
  • Your residential address
  • Claim history
  • Add-ons
  • Tax


Tax as a Component of Instalment Premium

Buying insurance is a big decision and it’s important to know all of the costs associated with it. You need to pay for mortality cost, which is the financial amount that will be paid out in case you die during the term of your policy. But there can also be GST applied on top of this, depending on what type of life insurance you buy. Different rates of GST are applicable to different types as well as how long your coverage is for. Make sure to check if GST applies before buying an insurance policy!

For example, A GST of 18 percent is imposed on term life insurance plans, which are the most affordable kind of life insurance because they only cover the mortality cost of a policyholder. You should be aware of this when you pay your yearly term plan premium of 5,000 INR, as around 900 INR of it goes to GST. For example, if you have chosen an accidental death benefit, an additional 18% GST to the rider is charged on you.

How to calculate your Instalment premium without tax?

There are three procedures to calculate an installment premium without tax:

  1. The first way to determine your installment premium without tax is through the premium receipt. For example, The information regarding the total premium amount and the cumulative GST amount (CGST + SGST) is printed at the very top of the receipt of LIC.
  2. The second way is through online premium calculators. For example, You can visit LIC official web portal to get information regarding your LIC premium.  Afterward, you’ll need to do the next actions:
    • Click on the premium calculator tab.
    • Enter your personal details and click on ‘Next’.
    • Click on ‘quick quote’ from the popup menu.
    • Choose your preferable policy from the new window that appears.
    • Click on ‘Coverage’ at the bottom of the window.
    • Enter your coverage details.
    • Click on ‘Quote’.
    • The amount of your premium will be displayed on the screen. It separates the basic premium from the tax.
  3. The third way to determine your installment premium without tax is to reach out to your insurance company via their online application or by visiting a nearby branch. It’s also possible to ask your agent to do it on your behalf.


The installment premium is a lump sum of money paid to an insurance company for coverage in the future. It covers medical expenses and other financial assets such as a mortgage or car loans. Premiums are not dependent on just the type of plan but also on external factors like taxes. Insurance premiums are required to be paid in installment. The installment amount is not entirely dependent on the type of plan and coverage received. There are external factors involved such as tax. What does this mean for you? It means that you need to understand how an installment premium without tax works so that you can better understand your insurance premium calculation process. The above procedures will guide you along the entire process of calculating your installment premium without tax.

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