Buy Term Insurance Policy at Lower Premium Before the Prices Rise


Term Insurance Premium is expected to witness a hike in the later part of 2022. However, you can still have the chance to lock your premiums at a lower rate if you decide to purchase a term plan now. Keep reading to know more.

The Covid-19 pandemic and the subsequent second wave have increased the mortality rate globally, resulting in insurers witnessing a sudden surge in claims. Therefore, the insurance premiums across the industry were hiked after 2020.

The reinsurance rates in the global insurance market are still rising, and this can affect the term insurance premiums in India once again as they can witness a big spike between 25 to 30 per cent in the year 2022.

While the group term policies are already costlier, individual term plans are also expected to follow suit sooner.

However, you can still have the opportunity to purchase term insurance at a lower premium before the price hike sets in.

Ways to Lock Premiums at Lower Rates Even if the Prices Rise

  • Hurry Up

Once you purchase a term life insurance policy, the premium amount is fixed, and you will continue to pay the same premium amount for the rest of the policy term. Therefore, it would be wise to purchase a policy now so that your premiums are locked in at the prevailing rate.

Furthermore, take the term plan with a long tenure, such as 20 to 30 years, so that you enjoy a high premium to coverage ratio.

  • The Age Advantage

The premium rates do not increase uniformly across all age groups. Generally, any price hike in a term plan is first reflected on the higher age group categories because an individual is expected to be more vulnerable to critical illnesses and lifestyle diseases at an older age, say 50 years or above.

On the contrary, the insurance underwriting rules would consider a younger person to be relatively healthy and less prone to any life risk. Therefore, you can get a term plan at a relatively much lesser premium amount if you begin early and buy a suitable term plan in your 20s or early 30s.

  • Maintain Healthy Lifestyle

The insurance underwriting rules also consider your lifestyle and its impact on your body. The more healthy you appear to the insurance firm, the lesser premium you might have to pay.

Alternatively, the insurance firm can charge a higher premium to people having vices like smoking, drinking alcohol, substance abuse or other notably harmful lifestyle habits that can put their life at risk.

Besides, it is always good to adopt a healthy and active lifestyle to increase your life expectancy as well as enjoy life to its fullest.

  • Choose Appropriate Payment Method

Insurance firms offer various payment methods to their policyholders, such as monthly, quarterly, bi-annual, or yearly premium payment. However, it is no secret that making an annual payment can decrease your premium amount than paying in monthly instalments.

  • Take Useful Add-ons

A term insurance policy can offer you many additional riders at an extra cost. You can consider taking some useful riders such as accidental death, waiver of premium on critical illness, etc. while purchasing your policy.

In the beginning, you might think of it as an extra burden. However, once the prices are hiked, and you keep paying the same premium amount with additional coverage, you will be thankful for getting these riders early on.

With the onset of the Omicron variant, the global outlook on the pandemic and the resulting macroeconomic factors are expected to remain uncertain for a while. Therefore, it is advisable to ensure the financial stability of your loved ones with a term plan as early as possible so that the impending insurance price hike does not catch up by surprise.

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