How To Get The Best Term Insurance Plan With Low Premium?

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Bengaluru, Karnataka, 25th of April 2025 : Term insurance is a crucial component of a sound financial plan. It offers a large life cover at an affordable premium, making it a must-have for anyone with financial dependents.

However, with numerous options available on the market, the challenge lies in selecting the best term insurance plan that not only provides comprehensive coverage but also comes at a low premium.

If you’re looking to secure your family’s future without burning a hole in your pocket, this article will guide you through how to get the best term insurance plan with a low premium.

What is a Term Insurance Plan?

A term insurance plan is a type of life insurance policy that provides coverage for a specific period or term. If the policyholder dies during this term, the nominee receives the sum assured. However, there is no maturity benefit if the insured survives the term. This makes term insurance a pure risk protection plan and the most affordable form of life insurance.

Why Choose Term Insurance?

Here are a few reasons why term insurance is essential:

Financial Protection: It ensures your family’s financial stability in your absence.
Large Coverage at a Low Cost: You can obtain high coverage at a relatively low premium.
Tax Benefits: Premiums paid are eligible for tax deductions under Section 80C of the Income Tax Act.
Customisable Options: Add-on riders like critical illness, accidental death, and disability can enhance the coverage.

Tips to Get the Best Term Insurance Plan with Low Premium

Looking for the best term insurance plan without overspending? Here are some smart tips to help you secure maximum coverage at the lowest possible premium.

1. Buy Early

Age is a major factor in determining your term insurance premium. The younger you are when you purchase the policy, the lower your premium will be. This is because younger individuals are considered lower risk for insurers.

Pro Tip: Start your term insurance plan as early as possible—even in your 20s—when your health is likely to be in top shape.

2. Choose the Right Coverage Amount

Your sum assured should be sufficient to cover your family’s future expenses in the event of your absence. But going overboard can lead to unnecessarily high premiums. A commonly suggested rule is to choose a coverage that is 10 to 15 times your annual income.

Consider your:

Existing liabilities (home/car loan)
Monthly expenses
Children’s education and marriage costs
Inflation impact

3. Compare Multiple Plans Online

The insurance market is comprised of numerous providers, each offering distinct premium rates and features. Comparing plans online can help you find the most cost-effective option that suits your needs.

Use reliable insurance aggregators or the official websites of insurance providers to compare:

Premiums
Claim settlement ratio
Policy features
Customer reviews
Inclusions and exclusions

Pro Tip: Look for plans with a high claim settlement ratio (above 95%) for better reliability.

4. Opt for a Longer Tenure

Choosing a longer policy term (up to age 65–75) may increase your premium slightly at the start but will save you from paying higher premiums later in life. If you choose a shorter term and later extend it, the new policy may cost more due to changes in age and health.

Bonus Tip: Some insurers offer increasing cover options where your sum assured increases periodically, which can help beat inflation.

5. Consider Single Premium Term Insurance

If you have a lump sum amount available, single premium term insurance can be a smart way to save on overall costs. Instead of paying premiums regularly over the years, you pay a one-time premium upfront for the entire policy term. This eliminates the risk of future premium hikes and policy lapses due to missed payments.

Benefits:

No recurring payment stress
Saves more in the long run compared to total regular premiums
Convenient and ideal for people with irregular income

6. Stay Healthy and Avoid Smoking

Your health status has a significant impact on your premium. Insurers categorize applicants based on lifestyle habits. Smokers, people with a sedentary lifestyle, or those with medical issues usually pay higher premiums due to the increased risk.

Tips to Reduce Premiums:

Avoid smoking or alcohol
Maintain a healthy BMI
Exercise regularly
Get regular health checkups

7. Choose Annual Premium Payment Option

Most insurance companies offer various premium payment modes, including monthly, quarterly, semi-annual, and annual. Annual payments are often slightly cheaper than monthly or quarterly payments due to reduced administrative costs.

8. Go for Online Plans

Online term insurance plans are often more affordable than their offline counterparts. This is because there’s no intermediary (agent) involved, and the cost of issuing the policy is lower. Many insurance providers even offer exclusive discounts on online purchases. So, buying your term plan directly from an insurer’s website or aggregator platform can save you money.

9. Consider Riders Only If Necessary

Riders like critical illness cover, accidental death benefit, and waiver of premium can be useful—but they also increase your premium. Only add riders that are essential to your situation. For instance, if you already have a separate critical illness policy, you may not need the same rider in your term insurance.

10. Review the Claim Settlement Ratio

The claim settlement ratio (CSR) represents the percentage of claims an insurer settles out of the total claims received. It indicates the reliability and trustworthiness of the insurance company.

Prefer insurers with a customer satisfaction rating (CSR) above 95%—this increases the chances of your family receiving the claim smoothly.

11. Read the Policy Document Carefully

Before finalizing any term insurance plan, read the fine print. Understand:

What’s covered and what’s not
Conditions for payout
How and when claims can be made
Renewal and cancellation terms

Being well-informed will prevent surprises later.

Getting the best term insurance plan with a low premium isn’t just about picking the cheapest option. It’s about making smart choices—starting early, staying healthy, comparing policies, and choosing the right coverage. Term insurance is a long-term commitment and a vital step toward ensuring your family’s financial security.