Life
General
Quick Services
Resources
Digit Glow Term Life Insurance
I agree to the Terms & Conditions
How to Reduce Term Life Insurance Premiums?
Term life insurance is the most inexpensive form of life insurance available. It offers immense coverage and acts as a safety net for your family. Given its affordability and importance, reducing your term life insurance premiums can further enhance its value, making it accessible to more individuals.
This article will examine several strategies on how to reduce life insurance premiums without having to sacrifice coverage.
Table of Contents
9 Ways to Reduce Life Insurance Premiums in India
1. Maintain a Healthy Lifestyle
Leading a healthy life is one of the most effective ways to reduce your term life insurance premium. An insurer may gauge how much of a risk you are by assessing your general health condition. Regular exercise, a balanced diet, and avoiding unhealthy habits can help you build a chance for minimal premiums.
Improvements in cholesterol levels, blood pressure, and weight are sure indications to an insurer that you are low-risk; thus, your premium will be significantly reduced.
2. Refrain from Smoking and Drinking Habits
Smoking and excessive drinking are among the highest-risk behaviours for life insurers. For smokers, the premiums may be as high as 2-3 times a non-smoker's. The same is applied to heavy drinking.
Quitting these bad habits of smoking and only occasionally drinking may make a huge difference in lowering term life insurance premiums because these two are considered to be among the highest factors in health issues and early death among those cases.
3. Choose Your Riders Smartly
Riders are additional benefits that can be added to your term life insurance policy, such as accidental death benefit riders, critical illness riders, or waiver of premium riders. While these can offer valuable protection, they come at an extra cost.
Be selective when choosing riders, and only opt for the ones necessary for your financial goals. Overloading your policy with fewer riders will increase your premium, so it's essential to choose wisely.
4. Start at a Young Age
When you are young, you can buy term life insurance, resulting in less expensive premiums. That's mainly because youths are generally healthier and less of a risk for an insurer to underwrite.
As time passes, the possibility of health issues increases, leaving you facing higher premiums. If you initiate a policy in your 20s or 30s, it will cost a lower rate locked in for your policy term.
5. Buy a Policy Online
Online insurance providers typically offer relatively lower quotes than traditional insurance brokers. You only pay for the middlemen whom you would have otherwise passed through if you were to buy conventionally, and then the insurer saves and can return this saving to you.
Most insurance companies offer some form of incentive for buying via their websites. You can also compare different plans at your convenience when buying online.
6. Compare Policies Before Buying One
It’s crucial to shop around and compare different policies from various insurers before making a final decision. Each insurer has its pricing model, and premiums can vary significantly for the same coverage amount.
Use online comparison tools to explore options, analyse the policy benefits, and select a plan that meets your needs while offering the best premium rate. Comparing policies ensures that you don’t overpay for your coverage.
7. Opt for a Longer Policy Term
A longer-term policy can ensure lower premiums over a longer time. Although short-term policies seem cheaper in the short run, they might appear more expensive when renewed much later in life because premiums increase.
A 20 or 30-year term will secure you a low premium for a longer period without the need to anticipate rate increases with age.
8. Pay Premiums Annually
Many insurance companies also offer a discount if you pay annually rather than monthly or quarterly. The administrative costs are at a minimum when you pay yearly, and that amount is given to you.
You might have a big cash flow upfront, but the amount saved in the long term compensates for it; thus, paying yearly can be a good strategy to bring down the overall premium.
9. Choose a Simplified Underwriting Policy
Simplification of underwriting policy often requires fewer medical exams and health-related requirements. Though it may seem a little easier to choose this option, simplified policies always tend to attract much higher premiums.
Taking up traditional underwriting, where the health is soundly analysed, you may even come out with lower premiums if your health is good. Thus, the benefits of simplifying underwriting are balanced against possible cost savings in a fully underwritten policy.
Factors Impacting Life Insurance Premiums
1. Age
The younger applicants will pay less because they pose a lower risk to the insurers.2. Health
A higher rate is caused by a pre-existing condition, such as heart disease, high cholesterol, or diabetes.3. Lifestyle
Risky habits, including smoking or excessive drinking, increase premium rates.4. Occupation
Policies for more dangerous occupations (e.g., construction, firefighting) are usually more expensive.5. Coverage Amount
Higher coverage amounts lead to higher premium rates.6. Policy Term
The length of the policy term affects the premium, with longer terms often being more cost-effective over time.FAQs about How to Reduce Term Life Insurance Premium
What factors affect term life insurance premiums?
How does purchasing term life insurance at a younger age help reduce premiums?
Can maintaining a healthy lifestyle lower my term life insurance premium?
How do I calculate the right coverage amount to avoid overpaying for term life insurance?
Does choosing a longer policy term reduce term life insurance premiums?
Can I reduce my life insurance premiums?
Why is my life insurance premium different from that of my peer, who is the same age?
How does comparing term insurance policies help you make the right choice?
I have just started my career. Is it the right time to buy a term insurance policy?
Is buying a term insurance plan beneficial during the COVID-19 pandemic?
How can I get an estimate of the term insurance premium?
Other Important Term Insurance Guides
Other Important Articles Related to Term Insurance
Disclaimer
- This is an informative article provided on 'as is' basis for awareness purpose only and not intended as a professional advice. The content of the article is derived from various open sources across the Internet. Digit Life Insurance is not promoting or recommending any aspect in the article or its correctness. Please verify the information and your requirement before taking any decisions.
- All the figures reflected in the article are for illustrative purposes. The premium for Coverage that one buys depends on various factors including customer requirements, eligibility, age, demography, insurance provider, product, coverage amount, term and other factors
- Tax Benefits, if applicable depend on the Tax Regime opted by the individual and the applicable tax provision. Please consult your Tax consultant before making any decision.
Latest News
27-03-2025
Life Insurance: Is 10x Income Enough Coverage In 2025?
A survey by Bajaj Allianz Life Insurance and NielsenIQ reveals that 1 in 3 Indians have never reviewed their life insurance coverage, even after major life events. While 81% believe coverage less than 10 times their annual income is adequate, the actual average is just 3.1 times. This highlights a significant financial protection gap. Despite this, 82% of Indians are confident in their current policies. The survey underscores the need for better financial awareness and adequate life insurance coverage in India.
27-03-2025
Huge Insurance Deals! ₹38,000 Cr Changed Hands Quickly.
In the past two weeks, the insurance industry saw major deals worth over Rs 38,000 crore. The largest was Bajaj Group's Rs 24,180 crore acquisition of Allianz’s stake in their joint ventures. Patanjali acquired a stake in Magma General Insurance, and IndusInd International Holdings bought Reliance Capital, which owns Reliance Nippon Life and Reliance General Insurance. Additionally, the UK-based Prudential Group partnered with HCL Group to create a standalone health insurance company.
25-03-2025
₹62 Lakh Crore: Life Insurance Industry's Growth Explained
IRDAI data shows the life insurance industry's AUM grew over 9%, from Rs. 55 lakh crore in March 2023 to Rs. 62 lakh crore in March 2024. LIC India leads with Rs. 44 lakh crore, 72% of the total AUM. Private players hold Rs. 18 lakh crore. SBI Life and HDFC Life follow with Rs. 3.85 lakh crore and Rs. 2.87 lakh crore, respectively. Tata AIA Life saw the highest growth at 39%. New entrants include Go Digit Life, Credit Access Life, and Acko Life.
25-03-2025
₹62 Lakh Crore: Life Insurance Industry's Growth Explained
IRDAI data shows the life insurance industry's AUM grew over 9%, from Rs. 55 lakh crore in March 2023 to Rs. 62 lakh crore in March 2024. LIC India leads with Rs. 44 lakh crore, 72% of the total AUM. Private players hold Rs. 18 lakh crore. SBI Life and HDFC Life follow with Rs. 3.85 lakh crore and Rs. 2.87 lakh crore, respectively. Tata AIA Life saw the highest growth at 39%. New entrants include Go Digit Life, Credit Access Life, and Acko Life.
14-03-2025
Life Insurers See 5.7% Premium Growth: April-Feb Report
In February, life-insurance companies saw an 11.6% drop in new business premiums (NBP) due to a 22% decline in premiums from state-owned LIC. However, from April to February FY25, overall premiums grew by 5.71% to Rs 3.35 trillion. LIC's premiums increased by 1.90% to Rs 1.90 trillion, while private insurers saw an 11.11% growth, reaching Rs 1.46 trillion.
14-03-2025
Life Insurers See 5.7% Premium Growth: April-Feb Report
In February, life-insurance companies saw an 11.6% drop in new business premiums (NBP) due to a 22% decline in premiums from state-owned LIC. However, from April to February FY25, overall premiums grew by 5.71% to Rs 3.35 trillion. LIC's premiums increased by 1.90% to Rs 1.90 trillion, while private insurers saw an 11.11% growth, reaching Rs 1.46 trillion.
04-03-2025
Life Insurance Agents Surge: 3 Million in 2025
Volkswagen India will launch the Golf GTI and Tiguan R-Line by the end of Q2 2025. The Tiguan R-Line, unveiled in 2023, features aggressive styling, larger 19-inch alloy wheels, and LED light bars. Inside, it boasts a 12.9-inch touchscreen, 10.3-inch digital instrument console, and ambient lighting. Powered by a 2.0-litre turbo-petrol engine with 261bhp and 400Nm, it offers six-speed manual and seven-speed DCT automatic transmissions.
04-03-2025
Life Insurance Agents Surge: 3 Million in 2025
Volkswagen India will launch the Golf GTI and Tiguan R-Line by the end of Q2 2025. The Tiguan R-Line, unveiled in 2023, features aggressive styling, larger 19-inch alloy wheels, and LED light bars. Inside, it boasts a 12.9-inch touchscreen, 10.3-inch digital instrument console, and ambient lighting. Powered by a 2.0-litre turbo-petrol engine with 261bhp and 400Nm, it offers six-speed manual and seven-speed DCT automatic transmissions.
19-02-2025
Life Insurance: FDI Boosts Growth Potential | 2025 Update
The Indian life insurance sector is set to grow significantly with the government's decision to raise the Foreign Direct Investment (FDI) limit to 100%. This move will provide the necessary capital for industry expansion, allowing insurers to increase mortality coverage and market penetration. Private insurers have already seen a notable rise in retail sum assured, outpacing new business premiums. The shift to unit-linked investment plans (ULIPs) may pressure margins, but increased capital inflows will help meet the growing demand for coverage.
12-02-2025
Budget 2025 Brings Changes to ULIP Taxation
The Union Budget 2025 has redefined the taxation landscape for Unit Linked Insurance Policies (ULIPs). Starting April 1, 2026, ULIPs with annual premiums exceeding ₹2.5 lakh will be classified as capital assets, subjecting their gains to capital gains tax rather than treating them as income from other sources. This amendment aims to align ULIP taxation with other equity-oriented investments, ensuring a uniform tax treatment across financial products. Policyholders are advised to reassess their investment strategies in light of these changes to optimize their tax liabilities.
Read More
Renew & Download Policy Document, Check Challan, Credit Score, PUC & more
Anytime, Anywhere. Only on Digit App!
Rated App
Rated App
Scan to Download
