A life insurance policy is a safety net to ensure that the family members continue to live a financially secured life even in case of an untimely demise of the policyholder. However, apart from the guaranteed payout of the sum assured, a life insurance policy can be much more than that. It can also be your savings and wealth creation plan.
These days there are a lot of options when it comes to getting a life insurance plan, as the types of life insurance policies available in the market have grown by leaps and bounds. And they are all designed to offer unique benefits as per an individual’s requirements. Whether someone is looking for a pure life cover or wants the dual benefit of a protection and savings plan, there is a plan that’s just right for that individual.
So, if you were thinking of investing but wondering how much it costs to invest in a life insurance plan these days, the answer to that lies in the type of life insurance you want to opt-in for. Also, the age you enter a plan has a significant impact on your premiums.
Let’s look at an example of how much an individual will pay for a ₹1 crore term insurance cover depending on age and whether the person is a non-smoker.
|Monthly Premium (non-smoker)
Even though this is just an example, you can clearly see that as the age of a person increases, they end up paying a higher premium for a lesser term. So, the idea is to start early if you want a higher cover at a lesser premium. Please note that the premium would significantly increase in the case of the person being a smoker and also on the type of insurance opted for.
Since the charges vary across every insurance provider, it’s better to look at the various factors that have an impact on the charges that you would have to bear on your insurance cover!
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It plays one of the greatest roles in deciding your premiums. As you age, your premium will rise up for the same of amount of coverage or even less as compared to buying when we are still young. Therefore, if you want lower premiums with higher coverage, buy insurance at a younger age to keep the costs low.
You may not realize it, but your gender also plays a vital role in how much premium you would be paying for your insurance cover. Men, as opposed to women, are considered higher risk, and therefore have to pay a higher premium for the same plan even if they are of the same age and health.
Types of Life Insurance
Premiums depend on the type of life insurance policy one opts for. While a term policy is arguably the most affordable in terms of premiums, a permanent life insurance, savings plan, or child plan would cost significantly more as the benefits are different and there’re savings and maturity components involved, which is not the case with a term life policy.
The higher the coverage, the more the premium. So, a ₹50 lakh policy would be much cheaper compared to a ₹1.5 crore life insurance policy.
The healthier you are, the better. As life insurance policies factor in things such as smoking, and drinking habits, lifestyle conditions, and whether there are any other health issues before issuing a policy.
Being occupied in an industry that is deemed as dangerous such as war journalism, construction, and law enforcement, you may end up paying a higher amount as a premium even if you meet all of the other criteria positively.
Your life insurance premiums are basically a culmination of all the points that we have discussed so far, and depending on how you meet these criteria decides the amount of premium you will need to pay on a life insurance plan.