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5 Reasons Why Term Insurance Plans Have Low Premium

While many people earn a stable income, millions of other people in India barely get through the month. An income curb for families with sole earner can be overwhelming. But what happens when the breadwinner dies? Not only the family has to suffer an emotional loss but will also face financial turmoil in the near future. Fortunately, if breadwinners of the family dedicate at least 1% of their income towards term insurance, they can protect their loved ones financially in their absence. For instance, if you are in your 30s and plan to get a term insurance coverage of INR 1 Crore for 25 years, it will only cost you approx. INR 4000 per year; whereas other life insurance products could cost approx. INR 21,000 per annum. This clearly shows that term insurance has low premiums compared to other policies in the market.

Reasons for Low Premiums on Term Insurance

A few reasons why term insurance plans in India have low premiums is explained as follows-

1. Minimum Bifurcation

Usually, insurance plans offer high premiums as it involves various bifurcations. The premium amount you pay is utilised for insurance coverage, policy administration charges, fund management, and more. When it comes to term insurance, the bifurcation of the premiums is done in two parts – insurance coverage cost and administration fees.

2. Healthy Lifestyle = Low Premiums

Insurers in India who offer term insurance plans often ask you (the applicant) to undergo a medical checkup. They also ask records of your leisure habits such as smoking and drinking. An individual who is fit physically and has fewer chances of contracting any disease is a low-risk applicant for the insurers. Hence, their term insurance premiums are low.

3. Death Benefits Only

Life insurance products available in the market offer returns when the policy matures. That way, it proves to be a great investment strategy for most people. However, term insurance plans ideally offer death benefits only. Here, the sum assured amount is paid to the beneficiaries of the policy in case of your premature death.

4. Policy Duration

As the name suggests, term insurance plans offer coverage for a specified term. The duration of the term insurance plan you choose will affect the premiums charged as well. The policy duration and premium rates are directly proportional to one another. As the policy term increases, so will the premium amount.

5. Profession

Many times, the profession of the applicant can also influence the premium amount of any insurance plan in India. The insurer considers the professional background of the applicant to ensure that they are not involved in life-risking activities. Depending on the profession, the premiums are charged on the chosen life insurance policy. But since term insurance is known to cover the premature deaths and protect the family of the policyholder financially in their absence, it is ideal insurance coverage for people working in high-risk professions.

Things to Keep in Mind while Choosing a Low Premium Term Plan

The low premium term plans in India may look affordable to many people, but you should bear in mind a few things before buying it.

  • Low premium term plans are the most basic term insurance plans available in the market. The policy only offers death benefits to the beneficiaries in case of your death.
  • Do not choose a low sum assured amount in the process to pay low premiums. The coverage you select should be sufficient to take care of your family’s financial needs in your absence.
  • Policy tenure should be longer. This is because if you were to survive the policy duration, you or the beneficiaries of the plan would not receive any benefits.

Get Affordable Term Plans at Finserv MARKETS

A term insurance plan is an ideal way to safeguard your family financially, in the long run. The death benefits received by the members can be used to accomplish their future goals without financial interruptions, especially in your absence.

For affordable term plans, you can take a look at Term Insurance Plans available on Finserv MARKETS. They offer comprehensive coverage to ensure complete financial security to your family, affordable premiums with high sum assured, bespoke term plans to suit all your needs, and so much more.

So, secure the financial future of your loved ones with Term Insurance Plans at Finserv MARKETS, right away!

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