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Here are Some Invaluable Hacks to Reduce Your Term Insurance Premium

By Bhavesh Mehta - Jan 16,2020
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Here are Some Invaluable Hacks to Reduce your Term Insurance Premium

Term insurance plans are fast becoming a necessity in today’s fast-paced, modern life. To maintain their financial portfolio, people have increasingly been seeking such plans. They provide a huge amount of financial security, which is not provided by any other financial tool. This is because in a term insurance plan, for a large sum assured, the customer must pay a very nominal premium.

This is essential for families with modest incomes, for whom an investment in permanent life insurance plans might not be financially prudent. Therefore, term insurance plans are ideal in providing insurance coverage to a family in the unfortunate event that the policyholder suffers an untimely death. On Finserv MARKETS, term insurance plans become an even better option with their swift claim settlements, and extensive coverage that can go as high as Rs. 1 crore, all while keeping an affordable premium.

While term insurance is more financially prudent because of its nominal premiums, these premiums can be lowered even further if one follows the right steps.

Here are a few points to keep in mind to ensure you get the most comprehensive coverage at the lowest possible premium price:

1. Buy term insurance when you are young and healthy 

The premium for a term insurance plan is a function of many parameters. One important parameter is the age and medical condition of the term insurance policyholder.

Age is to determine the person’s mortality risk, as the higher the age, the higher the mortality risk and therefore, the higher the premium. So, it is better to buy term insurance at a younger age. Also, if you buy a term insurance plan young, lenders are more likely to provide higher sum assured benefits at cheap premium options.

This has a correlation with health as well. If you are young, there is a high possibility of you being healthier since as age increases, health risks tend to increase as well. Therefore, it is highly recommended that you buy term insurance at a very young age so that you can enjoy a longer tenure for your policy as well.

2. Maintaining good health and lifestyle

The premium of a term insurance plan depends on a person’s health and lifestyle habits too. In case a customer has any pre-existing medical conditions or physical complications, their term insurance premium would be significantly higher than for those who don’t.

Similarly, a person can expect a higher premium if they consume tobacco since it has been scientifically linked with premature death and health risks. Therefore, health risks and lifestyle choices make a big difference since the insurance company is likely to charge a higher term insurance premium to compensate for the higher inherent risk involved.

3. Opting for longer tenure in the first go itself 

Term insurance plans often come with quite long tenures which can even go up to 40, or in some cases 50 years as well. This provides your nominees with the coverage they need, since these plans pay the death benefit only if death occurs during the coverage tenure. Key benefits of getting term insurance for a longer tenure can be-

  • You get coverage for a longer period which increases the probability of claim payments for your nominees even after your retirement age.
  • Your premium amount outflow is lower so that you don’t have to pay a higher premium afterwards for the same sum assured.

4. Paying regular premiums annually

Term insurance plans allow limited as well as regular premiums. Limited premiums are when you pay term insurance premiums for a limited duration while regular premiums mean paying premiums throughout the tenure of the plan. If you choose a regular premium payment option, your premium rates would be lower compared to limited payments. Annual or Half-yearly premiums are lower compared to monthly or quarterly mode as you get premium discounts.

5. Choose the correct sum assured

While under insurance is a curse, over-insurance is no boon either. An ideal sum assured could be 12 to 15 times of your annual income. If you buy a plan which has an unnecessarily high sum assured, your term insurance premium outgoes would be high too. So, be careful when selecting the sum assured and ensure that the chosen coverage amount is neither very high nor too low. With the term insurance plan available on Finserv MARKETS, you can get the optimum cover at affordable rates.

6. Better to go for pure death cover 

Modern term plans come with a lot of value-added features which enhance the scope of the plan. There might be inbuilt riders, the option of monthly incomes, the return of premiums paid on maturity, etc. You should not go overboard in selecting these value-added benefits. Don’t choose a plan which has unnecessary frills. Inbuilt riders are good additions but other paid features should be weighed against the additional premium costs associated with it. A Term insurance plan bought through Finserv MARKETS eliminates unnecessary complexities but offers vital riders like critical illness cover.

7. Utilise any available discounts

Term plans might allow you some discounts on premiums. Be on the lookout for the available discounts; for instance, if you download the Finserv MARKETS App, you can get access to juicy deals and perks for several products. When choosing a plan, look out for maximum possible discounts and offers which you can avail and reduce your term insurance premiums by using these benefits.

8. Detailed comparison before paying the premium

The last tip is also the most important one. There are hundreds of term plans available in the market. Don’t be hasty in choosing a plan. Go online and compare the available plans before you choose one. Comparing lets you choose a plan which charges the lowest term insurance premium without compromising on the coverage benefits.

All in all, term plans are a wise idea and by some simple steps, their premium can easily be lowered. However, what is most important is to find a reliable and trustworthy lender for your term insurance plan.

That is why it is a good idea to avail a term insurance plan on a platform like Finserv MARKETS which is transparent, secure and trusted by 100 million customers across India. Their affordable premiums do not burn a hole in your pocket and their extensive coverage and high sum assured amounts ensure that you save a lot of your hard-earned money. Another must-have is the Finserv MARKETS App which brings all your financial needs and services to one platform. Using its intuitive digital interface, you can promptly get insurance quotes, pay your premiums on the go using the UPI digital payments platform, get personalized and exciting deals and offers right, left and center and take advantage of instantaneous and secure transactions.

Finserv MARKETS, a subsidiary of Bajaj Finserv, is a one-stop digital marketplace that has been created for consumers on the go. It offers 500+ financial and lifestyle products, all at one place. At Finserv MARKETS, we understand that every individual is different. And that’s why we have invested in creating a proposition – Offers You Value. A value proposition that ensures you get offers which are tailor-made for you. We also offer an amazing product range and unique set of online offers across Loans, Insurance, Investment, Payments and an exclusive EMI store. Be it in helping you achieve your financial life goals or offering you the latest gadgets, we strive to offer what you are looking for. From simple and fast loan application processes to seamless and hassle-free claim-settlements, from no-cost EMIs to 4 hours of product delivery, we work towards fulfilling all your personal and financial needs. What’s more! Now enjoy the same benefits in just one click with our Finserv MARKETS App.

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Bajaj Finserv Direct Limited ("BFDL"), erstwhile Bajaj Financial Holdings Limited is a registered corporate agent of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited under the IRDAI composite registration number CA0551 valid till 10-Apr-2021. BFDL also renders services to Bajaj Finance Limited (‘BFL’) and Bajaj Housing Finance Limited (‘BHFL’) (referred hereinafter as ‘Lending Partner’) in sourcing of customers, providing preliminary credit support activities, fulfilment services and post-acquisition customer services related to lending business. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522