Demystifying Term Insurance Premiums in India: Understanding Costs and Unveiling Benefits

Term Insurance

Term life insurance is a pillar of financial planning in India. It offers a substantial financial safety net for your loved ones in the unfortunate event of your passing. However, navigating the world of insurance can be confusing, and understanding term insurance premiums is crucial before committing to a plan. This article delves into the concept of term insurance premiums in India, explaining their calculation, exploring the factors influencing them, and highlighting the key benefits associated with this cost-effective way to secure your family's future.

What is a Term Insurance Premium?

A term insurance premium is the annual or periodic payment you make to an insurance company to maintain your term life insurance policy. In simpler terms, it's the price you pay for a guaranteed death benefit payout to your designated beneficiary (nominee) if you pass away during the policy term (the predefined coverage period). Think of it as an investment in your loved ones' financial security.

How is the Term Insurance Premium Calculated?

Several factors influence the calculation of your term insurance premium in India:

  • Your Age: Generally, younger individuals pay lower premiums compared to older applicants. This is because the risk of death increases with age.
  • Coverage Amount: The higher the death benefit amount you choose, the higher the premium you'll pay. This reflects the increased financial payout the insurance company is obligated to provide in case of your demise.
  • Policy Term: A longer policy term (e.g., 30 years) typically translates to a higher premium compared to a shorter term (e.g., 10 years). This is because the insurance company is providing coverage for a longer period, assuming a greater risk.
  • Medical History: If you have any pre-existing medical conditions, your premium might be higher to reflect the increased risk of a claim.
  • Lifestyle Habits: Engaging in risky activities like smoking or skydiving can also lead to higher premiums due to the associated health risks.
  • Occupation: Certain professions deemed high-risk (e.g., firefighters, construction workers) might command slightly higher premiums.

Also Try: Bharti AXA Life Term Insurance Calculator

Benefits of Term Insurance Premiums

Despite the cost, term insurance premiums offer a multitude of benefits:

  • Affordable Coverage: Compared to other life insurance plans like whole life insurance, term insurance offers high coverage amounts at significantly lower premiums. This makes it a budget-friendly option for securing substantial financial protection for your family.
  • Flexibility in Premium Payment Options: Most life insurance companies offer flexible premium payment options in India. You can choose to pay annually, semi-annually, quarterly, or even monthly, allowing you to align the payments with your income flow and budget.
  • Peace of Mind for You and Your Family: Knowing your family has a financial safety net in your absence provides immense peace of mind. You can focus on building a secure future for them, knowing they'll be financially supported even if the unexpected occurs.
  • Early Coverage: Term insurance allows you to start securing your family's future at a young age when you may be financially starting out. The younger you start, the lower your premiums are likely to be, making it a cost-effective way to build long-term financial protection.
  • Tax Benefits (Subject to Change): In India, a portion of the premium paid towards your term life insurance policy might be deductible under Section 80C of the Income Tax Act. This can help reduce your overall tax liability, making term insurance an even more attractive option.

Additional Considerations

  • Compare Quotes: Don't settle for the first plan you come across. Get quotes from multiple insurance companies and compare premiums, coverage amounts, and policy terms before making a decision.
  • Be Honest About Your Health: It's crucial to be honest and transparent about your medical history during the application process. Withholding information could lead to claim settlement issues later.
  • Review Your Coverage Needs Regularly: As your life circumstances change, like having children or buying a house, revisit your term insurance coverage needs and adjust your policy accordingly.


Term insurance premiums are a calculated investment in your loved ones' well-being. By understanding the factors influencing them and considering the significant benefits they offer, you can make an informed decision. Remember, a well-chosen term insurance plan with a manageable premium ensures your family receives the financial support they need to navigate life's challenges, even in your absence. Don't hesitate to seek professional financial advice to explore your options and choose a term insurance plan that aligns perfectly with your budget and financial goals.

Suggested Plans

Bharti AXA Life Guaranteed Income Pro

  • A Non-Linked, Non-Participating Individual Life Insurance Savings Plan
  • 4 Income options to choose
  • Guaranteed 10% Addition of Annualised Premium (as per the terms and conditions of the policy)
  • Get all your premiums back at the end of the payout period under Long Term Income and Deferred Income variants
  • Flexibility to choose premium payment term or policy term

Bharti AXA Life Shining Stars

  • Non-linked, non-participating limited pay endowment Life Insurance plan
  • Designed to take care of the financial needs of your child.
  • Flexibility to opt between 2 Maturity Payout Options
  • Flexibility in Policy Term/Premium Payment Terms
  • A great short-term investment option for a child insurance policy.

Bharti AXA Life Super Series

  • A non-linked non-participating individual life insurance savings plan
  • Range of investment duration and returns
  • Guaranteed money back benefits (provided policy is in force and all due premiums have been paid)
  • Income tax benefits (as prevailing tax laws in India that are subject to changes)