Term Life Insurance Rates

Several schemes are available in term insurance for which rates vary significantly depending upon different factors. However, the benefits provided by term insurance differentiates it from other types of insurance. It is crucial to understand all aspects before zeroing down.

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Factors Affecting Term Life Insurance Rates 

Many factors are responsible for different term insurance rates. They are:

  • Age: Your current age plays a vital role for the insurer to decide on the premium amount to be paid. If you are younger, the premiums are generally lower and vice-versa. It is advised to buy term insurance early as it is less expensive. 

  • Family's medical history: If your family's medical history has chronic diseases like cancer and diabetes, you may be placed in the high-risk category. Thereby increasing the insurance premium rates.

  • Your current health: Most insurers ask for a detailed medical examination at the time of filling out the application. They also ask for a self-declaration on any pre-existing illnesses before proceeding. If the medical exam results reveal any acute diseases or life-threatening conditions, the insurer may or may not offer you life cover.

  • Gender: Usually, based on statistical data, women are offered term insurance at lower rates as the insurer believes women have a higher lifespan than men.

  • Weight: Applicants termed as obese on the BMI scale are asked to pay higher premiums for term insurance. It is because obesity can also trigger many different diseases like heart failure.

  • Smokers: Insurers advertise that non-smoker can avail themselves of term insurance at a discounted rate compared to smokers. It is due to several critical health problems related to smoking that can drastically reduce the insured's life span. 

  • Alcoholics: Insurers will enquire about your alcohol consumption. If you are an alcoholic, you may have to pay higher premiums. Alcohol consumption may cause serious health problems in the future, reducing your life span. 

  • Hobbies: If you seek adventure sports like skydiving, car racing, bungee jumping, paragliding and hang-gliding, the insurer will categorise you under high-risk category. It results in higher premiums. 

  • Occupation: If your profession puts life in danger frequently like pilots, chemicals related work, and explosive workers, you will be charged higher premiums. 

  • Type of policy: If your policy offers a higher sum assured for a longer-term, you may have to pay slightly lesser monthly premiums as compared to short-term plans. Term insurance plans usually have longer terms and lower premiums.

Different Policies Based on Term Life Insurance Rates 

There are numerous term insurance plans available in the market and vary based on rates and other factors. Some of the commonly opted plans are: 

  • Term insurance: This is one of the simplest life insurance plans. The policy term and the sum assured remain unchanged wherein the benefits are paid after the policyholder's death. The younger you are, the lesser the premium rates.

  • Term insurance with critical illness cover: Along with the regular life cover, this plan offers critical illness cover for 34 acute illnesses such as cancer, heart attack, and kidney failure. The premiums are a little higher than regular term insurance plans.

  • Term insurance with limited pay: The policyholder is asked to pay premiums for a limited period, but the benefits will continue until the policy duration.  

  • Term insurance with accidental cover: In this plan, the beneficiary receives regular life cover with an additional death benefit if the insured dies of an accident.

  • Standard term insurance: The policyholder will get cover against premium payments for a certain period. In the standard term plan, the insurer charges an yearly premium for annual cover.

  • Term return of premium plan: In this plan, the insurer will refund the premium paid if the policyholder is alive at the end of the term.

  • Group term insurance plan: This plan provides the same benefits as individual policies, but it is designed for a group of individuals who are part of a company, business, society, or sizable joint family.

How to Reduce Term Life Insurance Rates?

There are seven ways of reducing term insurance rates, like:

  • Assess exact insurance cover necessary by calculating the current expenses of your dependents in case of your demise and purchase a plan accordingly to reduce premiums

  • Improve your health by following an exercise routine and a healthy diet. Also, get rid of bad habits such as smoking, drinking alcohol and control your weight within acceptable limits. A clean bill of health will convince your insurer to provide you with plans with lower premiums. 

  • Premiums reduce after reaching a certain threshold of coverage. For example, if the premium is Rs 3000 for Rs 2.9 lakhs, then for a coverage of Rs 3 lakhs, the premium may reduce to Rs 2800. So look for such options to reduce the premium. 

  • Reconsider the length of your term insurance if you feel after a specific time your monthly expenses will reduce like home loan EMI paid off, children's education completed. Etc. 

  • Look for any hidden charges associated with the term insurance plans, negotiate with the insurer, and get a waiver. 

  • Stick with term insurance and don't get lured to go for the whole life insurance scheme 

  • Make thorough comparisons between various term insurance plans offered by insurers and choose the best bargain.

Features of Term Life Insurance Plans

The main features and benefits of term insurance plans are:

  • Term insurance plans are offered with flexible premium payment options like monthly, quarterly, half-yearly or annually.

  • Term insurance plans offer high sum assured for lower premiums when compared to all other types of insurance schemes. 

  • Various term insurance plans are available, and policyholders can opt for them based on the requirement. 

  • Nominees will receive the death benefit amount irrespective of the juncture at which the policyholder's death occurs.

  • Term insurance policyholders can claim tax exemptions under Income Tax Act.

 In Conclusion 

Term insurance rates depend on various factors like age, health, and family's medical history. Term insurance offers a high sum assured at lower premiums. It is one of the best ways to save your family from the financial distress caused by the untimely demise of the policyholder.


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