In today’s world, ensuring your loved ones' financial protection is a smart move. While many assume term insurance must be expensive, the truth is different. Many cheap term insurance plans provide coverage at low premiums. This guide breaks down everything you need to know to choose the cheapest term insurance plan in India. Remember, term insurance offers a simple and cost-effective way to secure your family's future.
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Different options, from level term insurance to decreasing term insurance, are available for individuals looking for affordable term plans to secure their family's financial future. Understanding the various types helps you choose the most cost-effective option based on your needs. A list of 5 types of low-cost term insurance includes:
Level term plans are straightforward, offering a fixed sum assured throughout the chosen term. It is one of the cheapest term plans in India with maximum value for pure life cover. With these plans, you enjoy the stability of fixed premiums and coverage throughout the term. The beneficiary receives a death benefit upon the life insured's passing.
Though premiums are higher than basic plans (typically 1.5 to 3 times), with Return of Premium Term Plans, you get all your premiums back if you survive the term. In case of your unfortunate demise within the policy term, your loved ones will receive the payout. This plan is ideal for those seeking low-risk protection.
A decreasing term insurance plan provides life coverage that decreases every year for a fixed term. These plans are typically used to cover specific liabilities, such as a home loan or personal loan, where the outstanding amount decreases over time. For example, if you have a home or car loan, this term plan in India offers a solution to protect your family from the financial burden of repaying those debts in your absence.
With increasing term plans, the coverage increases annually (usually by a fixed percentage). This helps keep up with inflation and ensures your family gets higher coverage as your financial responsibilities grow.
Convertible plans work similarly to other term plans in terms of life coverage but with added flexibility. A provision in these plans allows the policyholder to switch to another insurance plan later. For instance, if you get a 20-year term insurance policy but decide after 5 years that you'd rather have an Endowment Policy, a Whole Life Insurance policy, etc., you can easily switch to the alternative.
Choosing cheap term insurance doesn’t mean compromising on quality. These plans offer several advantages, such as:
One of the biggest benefits of low-cost term insurance is that you get life cover by paying low premiums. Many of these plans offer large coverage, enough to secure your family’s future in case something happens to you. This gives your family the financial strength to maintain a standard of living, pay off debts, or invest in future goals like education.
If budget is a concern, there are plenty of term insurance options that strike the right balance between affordability and protection.
Premiums are eligible for tax deductions under Section 80C of the Income Tax Act, resulting in extra savings. In addition, the payouts (in case of an unfortunate event) are usually tax-exempt under Section 10(10D).
Many affordable or cheapest term insurance plans in India also come with various riders. You can pay a small extra premium to include some of the useful riders, such as critical illness, accidental death, or disability income.
Avoid securing coverage more than you need. Instead of having an expensive plan, find a low-cost term insurance plan that meets your needs. This is a smart way to get the protection you need without overspending.
While affordability matters, informed buyers also consider the overall value a plan offers. Here’s a checklist to help you make the right choice:
Use online platforms and insurer portals to obtain instant quotes for ₹1 crore coverage across different providers. Compare premiums, riders, and digital ease.
What it means: Don’t just pick the first term insurance plan you come across. Benefits and prices can vary.
Example:
-Raj used an online term insurance premium calculator to check term plans from 5 companies for ₹1 crore coverage.
-One insurer quoted him ₹700/month for ₹1 crore of cover, while another charges ₹950/month for the same kind of cover.
Takeaway: Comparing plans helped Raj save ₹250/month and get the type of cover he wanted for his family.
A CSR above 95% indicates reliability and trustworthiness, ensuring your claims get due consideration.
What it means: This number tells you how often an insurer approves claims.
Example: Meera compared the claim settlement ratio (CSR) of two insurance companies.
Company A's CSR was 98.5% and Company B's was 91.2%.
She decided to go with Company A as it had a better claim record.
Takeaway: A good CSR ratio gives you confidence that your claim will be paid your loved ones in your absence.
Ensure the plan offers desired riders, flexible terms, digital servicing, and choice in premium modes (yearly, monthly, single-pay).
What it means: Look beyond the price. Look at what the plan delivers you.
Example: Ravi saw two similar-looking plans.
Plan X offered multiple premium payment and rider options. Plan Y allowed changes to the sum assured, if needed, at a later stage.
Takeaway: Features like riders, payment payment options, sum assured fleixbility and online servicing make life easier.
Aim for 10 - 15 times your annual income to ensure comprehensive coverage for dependents and liabilities.
What it means: Choose the right life cover so your family has enough moneyin case your are not there to support them.
Example: Riya earns ₹10 lakh/year and supports her parents, husband, and a child.
She picked ₹1.5 crore coverage (15x her salary) to ensure her family stays financially secure.
A smaller cover like ₹50 lakh wouldn’t be enough for long-term needs.
Takeaway: Don’t guess, calculate your cover based on income and responsibilities.
Pay attention to inclusions, exclusions, waiting periods (e.g., 90 days for some riders), medical requirements, and policy-specific clauses.
What it means: Every plan has rules. Don’t miss the small details because they matter.
Example: Pooja thought that her family will receive monthly payouts from her term insurance plan. However, when her family raised a claim, they were given a lump sum payout instead.
The fine print said very clearly that monthly income payouts weren’t part of the plan.
If she had looked through her payout options, she could have chosen a plan that matched her expectations.
Takeaway: Details like payout type, exclusions, waiting periods, or medical tests can affect your claim. Read the policy document thoroughly.
5-10 years while the coverage continues for the full term.
What it means: Choose how long you want to pay premiums, monthly, yearly, or for a limited time.
Example: Divya didn’t want to pay premiums after retirement.
She picked a “Limited Pay” plan: paid for 10 years but got 30 years of cover.
This helped her plan her finances better.
Takeaway: Look for plans that offer flexibility based on your income pattern.
Although each insurer may present unique terms, it is a fair assumption that most term life insurance plans in India share some key features:
You can choose the duration of your coverage, like 10, 20, 30, or even 40 years, based on your financial goals and dependents’ needs.
If the policyholder passes away during the policy term, the nominee receives a lump sum as a death benefit. This is an important financial support, especially in the absence of the primary earner.
The premium remains fixed throughout the policy term. This way, you will know exactly how much to budget for every year. However, this feature is specific to level term plans and may not apply to increasing or decreasing term insurance policies. So, it is important to understand the terms of the policy to avoid confusion.
If you miss paying your premiums within the grace period, the policy will lapse, and you may lose the coverage and benefits.
Flexible premium payment options let you choose a frequency that fits your financial planning.
Most insurers now offer a completely online process, from application to policy issuance. This makes term insurance more accessible and hassle-free.
The best time to buy term insurance is as early as possible, ideally in your 20s or early 30s. Here’s why:
The younger and healthier you are, the cheaper your premiums will be. Securing a plan early ensures you get maximum coverage at the lowest possible cost.
Buying early means your loved ones are covered for a longer period, especially through critical life stages like marriage, children, or home loans.
With age, health risks tend to increase. Early buyers typically face fewer health screenings and have a higher chance of policy approval.
Term insurance gives peace of mind and allows you to plan long-term finances better, knowing your family is financially protected in your absence.
If you're planning to start a family or already have dependents, buying term insurance early ensures their future is secure, no matter what happens.
Here are some tips to lower your Term Insurance premium.
A. Getting quotes from various insurance agencies before deciding on the best option is a great way to find affordable term life insurance. Premiums can vary significantly between companies, even for the same coverage.
B. By comparing multiple term life insurance quotes, you can identify the best rates and find a policy that suits your needs and budget. You can also utilise online comparison tools.
As mentioned earlier, your term length and coverage amount heavily influence the insurance premium. If you want to save on costs, consider opting for a shorter term or lower coverage amount. However, exercise caution when making these adjustments to ensure you don't compromise the financial security of your loved ones.
Taking proactive steps to improve your health and mitigate risk factors can lead to affordable term life insurance rates. Here are some ways to enhance your health and minimise risks.
Cost is critical, but value, quality, and reliability are also:
Validate the Claim Settlement Ratio (CSR), public reviews, and regulatory standings.
Look beyond price to digital presence (app reviews), ease of filing claims, and customer support speed. A few hundred rupees in premium savings won’t matter if claim support is lacking.
Is the policy upgradable? Can it handle lifestyle changes like illness or new loans? Ask these questions before purchasing a life insurance plan.
Affordable term insurance is not just for those on a tight budget—it’s a strategic choice that fits a wide audience:
Young working professionals who have just started their careers should consider buying term insurance. The premiums for term insurance are low when bought at a young age, so it is an ideal time to buy it.
Newly married couples who have started a family should consider term insurance to secure the financial future of their dependents in case of an unforeseen event. Term insurance can provide a financial cushion to the family to take care of their expenses and other financial obligations.
Whether you’re paying off a home, car, or personal loan, an affordable term plan ensures outstanding liabilities don’t pass on to your loved ones if anything happens to you.
The stakes are higher in families with only one earning member. A term plan with a manageable premium guarantees financial support for dependents even during income disruptions.
Individuals working in high-risk jobs such as mining, construction, or aviation should consider term insurance as it provides financial security to their dependents in case of an accident or sudden death.
Small business owners who have taken loans or have financial liabilities should consider term insurance to secure their business and family's financial future in case of their sudden demise.
Low-cost term plans can fit many people's needs. Here’s who benefits the most:
They typically invest and save early on, so low-cost term plans are an affordable way to protect their families without paying higher premiums.
As financial responsibilities grow, childcare, education, lifestyle, parents lean towards term plans to secure their baby’s future.
First-time insurance purchasers want straightforward and transparent processes.
Regarding affordable term plans, the ACKO Life Flexi Term Plan is a pure and non-linked plan offering comprehensive life coverage. The benefits of this unique term plan include the following:
Also read: Life Insurance Plans
To apply for a Low-Cost Term Insurance policy, you will need to provide the following information.
Before you buy a Term Insurance policy, you should be aware of the kinds of plans available and the documents required.
Many life insurance providers now offer term insurance plans online, driven by the growing trend towards digital solutions. This shift means you can purchase insurance quickly and easily, eliminating the need for in-person visits and minimal paperwork. The online approach allows you to compare several policies, whether searching for a 1 crore life insurance plan or a less expensive option. Online plans are also frequently accompanied by attractive discounts and promotions, which lower costs.
Using a term insurance calculator in India, you can quickly determine the appropriate coverage and costs based on your needs. Overall, digital platforms are making the process of buying and claiming term insurance faster and easier. As a result, online life insurance in India is expected to grow even more popular as more individuals become tech-savvy.
Cheap and affordable term insurance in India is achievable when you buy early, choose wisely, and stick to trusted insurers. Also, make use of digital convenience and provide lasting financial protection for your family. Don’t let myths hold you back from buying the right, cheapest term life insurance based on your needs.
Here are some common questions about low-cost term insurance in India
Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet, and is subject to changes. Please go through the applicable policy wordings for updated ACKO-centric content, and before making any insurance-related decisions. For full disclaimer kindly click https://www.acko.com/life/disclaimer/
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Reviewed by Vaibhav Kumar Kaushik 
Acko Technology & Services Private Limited
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