Cheapest Term Plan in India: Factors That Reduce Your Premium Cost

What is Term Insurance?

A term insurance policy is a product offered by life insurance companies. It is often referred to as the purest form of life insurance because term insurance offers only death benefits, with no maturity benefits. If the assured individual passes away during the tenure of the policy, the nominee receives the death benefit. However, if the life assured survives the policy tenure, the policy ends without any payout.

If you are looking for a term plan that offers a maturity benefit, then you can opt for a term return on premium (TROP) policy. Under this policy, the total premium paid is returned to the insured if the life assured survives the policy term.

How to Get Cheapest Term Insurance?

Term insurance requires the policyholder to pay a premium amount to get the coverage. This premium is affected by various factors. If you want to secure the cheapest life insurance in India, here are a few tips:

Buy Life Insurance Early

Getting life insurance at a younger age means you can secure a much lower premium for life. This is because insurance companies determine risks based on age and health, and younger people are generally considered to have lower risks. Besides, buying early will also save you from having to deal with health problems that may increase your premiums.

A Pure Life Cover

Term insurance is the cheapest way to get life insurance cover. This is because term insurance is pure protection, with no savings or investment component. Since the insurer pays only the death benefit, not the maturity value, the premiums are much lower than those for an endowment or money-back policy.

Select the Right Policy Term

By selecting a proper policy term, you can also make sure that you do not pay premiums for unnecessary costs. The policy's tenure must cover your primary financial obligations, loans, your children's education, or retirement. A properly matched term will give you the assurance that you are fully protected without having to pay for the years that you already have in excess.

Compare Plans Before Buying

Comparing life insurance plans online gives you the opportunity to check and compare premiums, coverage features, exclusions, and claim settlement ratios for different insurance companies. It helps you find the policies that offer the most coverage for the least cost. Proper comparisons will help you avoid paying more than you should. It also gives you the confidence to pick an insurer who has a strong track record of paying out claims.

Avoid Unnecessary

It is true that riders can provide additional coverage, but adding too many can significantly increase premiums. Only consider riders that correspond to your actual needs. For example, a critical illness or accidental death may be meaningful. Do not purchase add-ons that you may not really need.

Maintain a Healthy Lifestyle

Leading a healthy lifestyle, regular exercise, proper nutrition, and weight control make you a low-risk applicant for insurance companies. Good health is often rewarded with low premiums because the company considers you less likely to make a claim. This change can be reflected in your medical examinations and underwriting, which are directly linked to your term insurance cost.

Refrain from Smoking and Drinking

Smoking and heavy alcohol consumption are among the major risk factors for insurers. The premiums tend to increase significantly for such cases. Giving up cigarettes and reducing alcohol consumption will improve your health status and risk category. Many insurance companies consider individuals as non-smokers after a certain period of quitting, and therefore, they offer much lower premiums.

Opt for a Longer Policy Term

Choosing a longer term, say 20 or 30 years, essentially keeps your lower premiums for a longer time. Shorter policies might look cheaper from the outside, but they can become more expensive if you renew later, as premiums increase with age. A longer term gives you stable protection and shields you from rate hikes in the future.

Pay Premiums Annually

Paying premiums once a year rather than monthly or quarterly is often rewarded with a discount from insurers. Annual payments reduce the insurer's administrative costs, and that cost-saving is passed on to you. It may be a bit of a larger cash outlay at the beginning, but in total, you pay less over the policy term.

Tax Benefits of Term Insurance

There are multiple benefits of a term insurance policy, such as peace of mind, financial security, flexible tenure, and easy eligibility. Among these, tax benefits are among the most striking. If you purchase a term insurance plan, you can get tax benefits of up to ₹1.5 lakhs on premium payments u/S 80C of the Income Tax Act, under the old tax regime.

To Conclude

Financial stability is one of the most important aspects of life. Not just the current one, but people also look for ways to protect their loved ones' future financial interests. This is when term plans can be among the wisest financial decisions. It is a promise of a stable tomorrow for your loved ones.

As discussed above, getting the cheapest term insurance is possible if you are informed and aware. At Jio Insurance Broking, we make it easier for you to purchase term insurance plans. Compare to get the cheapest life insurance at Jio Insurance Broking.

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