There are over 25 life insurance companies in India offering term insurance plan. However, each term plan has their own pros and cons. Even the premiums for the term insurance plans vary between insurance companies. If you are looking for a term insurance plan with low premiums, you are at right place. What is Term Insurance Plan? Which are the Low Premium Term Insurance Plans in India?
What is Term Plan?
Term plan is a simple life insurance plan where life risk coverage is provided by the insurance company to the life insured. In case of unfortunate demise of the life insured, the insurance company would provide sum assured to the nominee and life insurance plan would close thereafter.
There are several term insurance plans in India and premium would depend on the features offered in such plans.
10 Low Premium Term Insurance Plans in India
Here is the list of cheapest term insurance plans in India. These term insurance plans are sorted by lowest to highest in terms of premium charged by them. The term plan premium indicated here is for 30 years male non-smoker and it is based on the minimum sum assured.
|Term Plan Name||Min Sum Assured||Tenure (Years)||Yearly Premium for 30 year male|
|Aegon Life iTerm||25 lakhs||30||2725|
|PNB MetLife Mera Term Plan Plus||10 lakhs||75||3746|
|Kotak e-Term Plan||25 lakhs||30||3953|
|LIC Jeevan Amar||25 lakhs||30||3983|
|SBI Poorna Suraksha||20 lakhs||30||4457|
|LIC Tech Term||50 lakhs||30||4838|
|HDFC Click 2 Protect Life||50 lakhs||30||5625|
|Bajaj Allianz Smart Protect Goal Term Plan||50 lakhs||30||5673|
|Tata AIA Maha Raksha Supreme||50 lakhs||30||5800|
|ICICI Prudential iProtect Smart Term Plan||50 lakhs||30||6228|
What factors affect the premium for term insurance plan?
Term insurance plan premiums would affect based on some of the key factors like:
1) Sum Assured
High sum assured means high premium charged by the insurance company.
Generally, one would consider 2 Crore or 5 Crore term insurance plan without any reason. One should always assess based on the need and take adequate sum assured.
As an example, one should consider 20x of annualized income or 20x of annualized expenses as the sum assured in term insurance plan. This way, even in the absence of earning member, the family would be able to survive for the next 20 years without any worry.
2) Age of the policy holder
Term plan for a young individual would cost very low vs. the person in middle aged. The reason is that a young person is less prone to diseases compared to middle aged or senior citizen. One should always consider term plan at their young age so that the premium is low and at the same time, the same premium continued for the rest of the life.
3) Tenure of the policy
Longer the tenure, lower the premium offered by insurance companies. The reason is that customers would be sticking to them for long term, hence some incentivization is provided to them by way of low premium in term plans.
Many insurance companies provide simple term insurance plans. They also offer riders which come with additional premium. One should carefully review these riders before opting them.
5) Claim settlement ratio
The claim settlement ratio is the ratio of total claims settled by the life insurance company against the claims received by them.
E.g. if the company received 1,000 life death claims, however honored only 900 and rejected 100. In this case, claim settlement ratio is 90% (900/1,000).
Higher claim settlement ratio companies are trusted by policy holders. Since they have rejected lower claims, they might charge higher premium on their term plans. Companies offering Low premium term insurance plans might be rejecting claims and might have low claim settlement ratio. One should check this before opting a low premium term insurance plan.
6) Online Term plans
Online term plans come at lower premium as there is no involvement of insurance agents in between. If you are looking for low premium term insurance plan, you should buy them online directly from the insurance company.
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