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Can I Reduce My Life Insurance Premium Without Affecting the Sum Assured?

Yes!! You can easily reduce your life insurance premiums without affecting the life cover. Life insurance premiums in India depend on a number of factors such as medical condition, age, coverage amount and lifestyle habits. One of the best ways to reduce your insurance premium is to start at an early age. 

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How to Reduce Life Insurance Premiums in India 2024?

Here is how you can lower your life insurance premiums in India:

  1. Quit Excessive Drinking and Smoking

    Excessive drinking or smoking can increase your risk of contracting lung or liver cancer or cause some other health issues in the long run. Therefore, insurers may increase your life insurance premiums in case you are a frequent smoker or alcohol consumer.

    However, in case you want to lower your life insurance premiums, you can consider giving up on smoking and drinking for at least 12 months before buying life or term insurance in India. 

  2. Keep Occupational Risks and Hobbies in Mind 

    A person’s occupation or hobbies can also impact the life insurance premium rate of an individual. For example, a person who works a desk job might have a lower premium than a person who works at construction sites. This is because being surrounded by high risk places can increase your risk to life, which consequently increases the life insurance premiums. 

    Similarly, a person who frequently participates in adventure activities like scuba diving, paragliding, bungee jumping, and more will have a higher life insurance premium because of their increased risks. It is important to note that insurance companies in India may increase your premiums, decrease offered life cover, or may not offer insurance at all, as per their T&Cs. Therefore, if you want to reduce life insurance premiums, you may want to opt for low risk jobs and avoid adventure activities.

  3. Inform the Insurer About the Pre-Existing Illnesses 

    You should be asked to go through a medical examination at the time of buying a life insurance plan. You are required to be honest about your health issues. In case of any pre-existing illnesses, you need to mention them in the documents. Various insurers charge a high amount of premium for individuals who have a pre-existing disease because it increases the company’s risk. 

  4. Longer Policy Tenure and High Sum Assured

    Insurers charge a high premium if you opt for a longer policy tenure and higher sum assured. Likewise, high coverage could mean that the insurance company will have to pay a large amount in case of your demise during the policy term. In case the premium quoted by the insurer is high, you can reduce your life insurance premiums by either decreasing your policy term or by lowering your sum assured.

    However, you should make sure that you opt for the right policy term and sum assured, as this amount will help your family maintain their financial stability in your absence. 

    Apart from policy tenure and sum assured, the premium payment term also impacts your life insurance premiums. The lower the premium payment term, the higher the life insurance premiums will be. Therefore, if you want to reduce your life insurance premiums, you can pay the premiums for the regular policy term.

  5. Select the Right Type of Life Insurance

    The type of life insurance you opt for can also impact your life insurance premiums. This is because the premium rates increase with the benefits offered. For example, you can secure a large life cover of 1 crore at just Rs. 525 per month with term plans since they are pure risk cover policies. But, with investment plans, you may need to invest over Rs. 10,000 per month to get returns of 1 Crore. Therefore, you should always take a look at the right type of insurance best suited for your needs.

  6. Comparison of Quotes from Multiple Insurance Companies 

    There are various life insurance plans available in the market from the top life insurance companies in India. These insurers offer life insurance plans at different rates depending on the insurer and their benefits. You should always compare life insurance plans from different insurers based on their premiums, sum assured, benefits, riders offered, and more. With Policybazaar, you can compare up to 3 plans side-by-side online on the same platform and choose the most suitable plan as per your needs.

  7. Additional Riders

    Riders are the additional benefits that you can add to the base policy to enhance its coverage. With these riders, you can get comprehensive cover at affordable premiums. You can add riders like accidental death, accidental total permanent disability, critical illness, terminal illness, and hospicare benefits in your base plan. These term insurance riders may increase your premiums but offer comprehensive coverage against the eventualities of life. 

  8. Buying Online or Offline 

    Policies that you buy online are often cheaper than when purchased via offline channels. The reason is that online sales help insurers save on the distribution and administration costs, and they eventually pass a fair percentage of these savings to the policyholders by the way of low premiums. Not only that, online purchase of life insurance also reduces the commission that agents may charge in offline mode.

Factor Affecting Life Insurance Premium Rates Factor Affecting Life Insurance Premium Rates

one crore term plan
plus

Term Plans

₹1
Crore

Life Cover

@ Starting from ₹ 16/day+

₹50
LAKH

Life Cover

@ Starting from ₹ 8/day+

₹75
LAKH

Life Cover

@ Starting from ₹ 12/day+

Wrapping it Up!

Life insurance plans not only help you secure your loved ones in the event of your unfortunate absence and create wealth in the long run but also save on yearly taxes. However, before getting the most suitable plan, you should always compare the life insurance premiums, as purchasing a plan with high premiums can increase the chances of policy lapsation. You can lower your life insurance premiums to secure family at affordable premiums in the above mentioned ways.

FAQs

  • Q: How can I lower my life insurance premium?

    Ans: The three most simple ways to reduce your life insurance premiums are by:
    • Buying life insurance at the earliest
    • Pay the premiums in annual mode/lump sum
    • Maintain a healthy lifestyle
  • Q: What is the difference between the term and life insurance premiums?

    Ans: Term and life insurance premiums are different because of the benefits of both types of plans. Term insurance premiums are usually lower than life insurance premiums because term plan only offer pure risk protection, whereas life insurance plans offer protection as well as wealth creation benefits.
  • Q: What are the factors that affect life insurance premiums in India?

    Ans:The following factors affect the life insurance premium rates in India:
    • Entry Age: The age at which you buy the policy as the lower your entry age, the lower the premiums will be
    • Type of Policy: Some types of life insurance, like term plans, are more affordable than other types of plans.
    • Compare Quotes: You can compare the life insurance quotes from different plans and buy the plan most suitable for your needs.
    • Maintain Health: Most insurers reduce the life insurance premiums for individuals who maintain good health.
    • Enhance life cover: You can enhance the life cover of the policy with life-stage benefits like marriage, childbirth, or home loans.
  • Q: How can I calculate an estimate of the term insurance premium amount?

    Ans: Calculating term insurance premium is an important step in planning for your financial future and securing your family members. Term insurance is a type of life insurance that offers financial coverage for a fixed term and pays out a death benefit to the nominee/beneficiaries if the policyholder dies during the policy term.
  • How to calculate the term insurance premium online?

    Ans: You can easily calculate the term insurance premium online by using the term insurance calculator online tool
  • What are the benefits of term life insurance?

    Ans: Here are 4 common term insurance benefits:
    • Low premium rates
    • Tax Benefits
    • Death Benefit
    • Long term coverage

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