Here's How to Save Money on Life Insurance Premiums

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Life insurance is one of the many things you'll come across in your quest for the right financial plan. Irrespective of what your long-term goals and short-term dreams may be, life insurance is a necessity. It keeps your family's future secure in the face of unexpected uncertainties.

For example, let's take the case of Mohan, a 30-year old chartered accountant. He is the sole earning member in his family, and his income is their only source of income. He's married, and he has two children and a dependent parent at home. Mohan has many financial goals, but the last thing he expects is something unforeseen – like his own demise.

Unfortunately, if such a thing comes to pass, his family could be left without any financial security. But Mohan, being a smart guy, has a Rs. 1 crore term plan in place. So, if anything were to happen to him, his family will have a 1-crore safety net to fall back on.

If you think this is a smart financial move, perhaps you'll want to purchase an adequate life cover too. And while you're at it, if you're looking for ways to make your insurance plan more affordable without compromising on the extent of coverage, there are many things that you can do.

Here are some ways to reduce your insurance premium when you're shopping for life insurance.

  • Consider opting for term insurance

    Life insurance plans that come with an inbuilt savings component offer two kinds of benefits to the policyholder. The first is the death benefit paid out to the nominee in case the policyholder passes away during the plan's tenure. The second is the maturity benefit paid out to the policyholder in case they survive the policy term.

    Term insurance plans, being pure protective covers, offer death benefits alone. As a result, they also have the most affordable insurance premiums in the market. If you are primarily looking to secure your family's future, a term plan can give your loved ones the financial security they need at an affordable insurance premium.

    In the wake of the COVID-19 crisis, the number of insurance claims has increased by around 4 to 5 times compared to the previous year.[1] As a result, many insurers are increasing the rate of the premium they charge for life covers. This includes term insurance as well. However, if these rising rates have you worried, we have some good news for you.

    While premiums in the market are generally on an upward trajectory, we at Aditya Birla are doing things differently. We've cut the premium rates for the ABSLI DigiShield Plan, our flagship term insurance offering, by up to 15 percent! Our optimism lies in the fact that vaccinations are rising in the country, and an increasing number of people are becoming more health-conscious.

    What does this cut in premiums mean for you? Well, this means you can purchase a life cover as high as Rs. 3 crore at extremely affordable premiums.

    The ABSLI DigiShield Plan also gives you several other benefits such as:

    • 10 plan options to meet your specific needs
    • Option to choose coverage till 100 years of age
    • Flexible death benefit payouts in the form of a lump sum, monthly income, or both

  • Try and purchase insurance earlier in life

    When you purchase a life insurance policy earlier in life, at a younger age, your chances of getting an affordable insurance premium are higher. That's why it's a good idea to buy a life cover as soon as you get your first job and start earning. The younger you are when you buy your life insurance policy, the lower your insurance premium may be.

    Take the ABSLI DigiShield Plan, for instance. If you are a non-smoker, male policyholder opting for Rs. 1 crore sum assured with coverage till the age of 80 years, here's how much premium you will be charged for the plan's level cover option at different ages.

    Age at entry

    Annual premium charged (Rs.)

    25 years

    11,100

    35 years

    16,400

    45 years

    28,700

    55 years

    48,800

    65 years

    85,900


    See how the premiums increase with age? So, prioritizing insurance purchase at a younger age is a great way to reduce your insurance premium. This is because younger people have a much lower mortality rate than older people. And this means the chances of the insurance company having to pay out claims is reduced as well.

  • Make sure you compare different insurance plans

    Depending on several factors like the tenure of the plan, the extent of the life cover offered, the additional features of the plan and other aspects, the premium charged varies from one life insurance plan to another. Some plans may be more affordable than others. And the best way to zero in on an affordable plan is to compare your options.

    There are many easy online tools that you can use to compare the different life insurance plans available. You can check out the benefits vs. the costs and ultimately select the plan that charges the most affordable insurance premium. While you're at it, make sure that you also keep an eye on the cover you're selecting. You don't want to compromise on that now, do you?

  • Ensure that you maintain a healthy lifestyle

    The premium charged on life insurance plans is also influenced by your lifestyle choices. For example, a 25-year old man who's a smoker may likely be charged a higher premium than a 25-year old man who is not a smoker. That's because the smoker's mortality rate is considered to be higher.

    If you're looking to reduce your insurance premium, maintaining a healthy lifestyle is a good way to go about it. Exercise regularly, try to maintain a healthy weight, and eat a balanced diet. This will give you great overall health, which, in turn, can translate to more affordable insurance premiums.

  • Check for online plans

    Most insurance service providers today offer both online and offline life insurance plans. And generally, online plans tend to be more economical than offline plans. This is due to the fact that there's no additional cost involved on account of added paperwork, or on account of intermediaries between you and the insurer.

    So, if you want to reduce your insurance premium without reducing the cover you've opted for, an online plan may be the solution you're looking for.

    The ABSLI DigiShield Plan, for instance, is an affordable term plan that you can buy online. That's two ways to reduce your insurance premium right there – a term plan and an online purchase.

Last words

With these tips to rely on, you'll find that it gets easier to reduce your insurance premium. And once you've purchased your life insurance plan, it's also important to pay your premiums on time. This keeps your policy from lapsing, and it also ensures that you do not have to pay any late fees. These may be small benefits, but over time, they can add up to huge advantages.

[1]https://indianexpress.com/article/business/banking-and-finance/insurers-may-hike-premiums-soon-to-offset-rising-covid-claims-impact-7422056/
ABSLI DigiShield Plan (UIN: 109N108V06) is a non-linked non-participating individual pure risk premium life insurance plan; upon Policyholder's selection of Plan Option 9 (Level Cover with Survival Benefit) and Plan Option 10 (Return of Premium [ROP]) this product shall be a non-linked non-participating individual life savings insurance plan.
ADV/8/21-22/1015

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Term Products

ABSLI Life Shield Plan

A term insurance plan that offers you the flexibility of plan options suitable for your family's non- negotiable goals and ensure they need not compromise on their lifestyle. UIN: 109N109V06

  • Choice of 8 plan options
  • Cover your spouse under the same policy
  • Longer Life cover till age 85

ABSLI DigiShield Plan

PROTECTING multiple life needs with one plan is now possible. UIN 109N108V08

  • 10 Plan Options to suit your varied protection needs
  • Flexible death benefit pay-out options
  • Life insurance cover for 1 year or till age 100 yrs

ABSLI Saral Jeevan Bima

A simple plan to protect your family’s financial future (UIN 109N128V01)

  • Simple & affordable plan
  • Flexible premium paying terms
  • Enhance insurance cover with rider

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