Business Guides

Why Term Insurance is a Low-Cost Policy?

If you are looking for low-cost life insurance, then a term insurance plan is a budget-friendly option for you. As the simplest form of life insurance product, it offers insurance coverage only for a specific time period. Since the term insurance policy only offers a death benefit to the nominee in the event of the policyholder’s demise, the risk is far less as compared to the whole life insurance policies. Thus, term insurance is the low-cost insurance policy in the life insurance product line.

term insurance policy compensation plan in place
edar / Pixabay

Unlike other life insurance policies, there is no cash value offered in the term insurance policy, thus the premium rate of the term policy is much affordable as compared to the other life insurance policies. However, if you want to save more on the premium cost of your term insurance policy and want to maximize the benefits then you should consider the below-mentioned factors before purchasing the plan.

Buy the Insurance Policy at an Early Stage of Life

If a person purchases a term insurance policy at an early stage of life, then he/she has the advantage to avail the policy at a low premium cost. The insurance providers generally offer attractive insurance coverage at a low-cost premium because as compared to the aged people, the mortality risks among young people are very less. Thus, they possess a low risk to the insurance company. With the increase in age, the premium cost of the policy also increases simultaneously. So, while purchasing a term insurance policy, it is always advised to buy the policy at an early stage of life, so that you can get the best plan at an affordable premium rate.

Compare Prior Choosing a Plan

Do not just buy the plan just for the sake of buying. Make sure that you compare the plans online before choosing a particular plan. As there is an extensive range of insurance plans available in the market, compare the plans online and choose the most beneficial plan at an economical premium rate. Even though most of the term insurance policy offers similar features, the claim experience varies as per the premium rates of the policy. You can also take help of premium calculators in order to compare the quotes of different plan and choose the best policy as per your own requirement and suitability.

Maintain a Healthy Lifestyle

The premium amount of term insurance policy and the receiving of the application of the policy depend on the applicant health. The insurance providers can ask the policy buyers to undergo physical health check-up. The premium amount of the policy can be affected if the insurance buyer has the habit of smoking. The insurance provider applies a very simple concept while determining the premium amount of the term insurance policy. The premium rate of the plan is determined on the basis of the individual’s mortality risk and by maintaining a healthy lifestyle one can reduce this risk easily. Thus, the premium rate of the term policy also decreases simultaneously.

Buy the Policy for an Ideal Term Period

If you select a plan with a longer-term period, the premium amount of the term insurance policy will automatically cost you more. For instance, if you purchase a policy for the tenure of 10 years the premium amount of the plan will start from around Rs3,300 per month. Whereas, in case you purchase a plan for the tenure of 30 years then the premium rate of the policy will be around