How to Save Money While Purchasing Term Insurance

5 min read | Updated on July 15, 2025, 14:21 IST

About Upstox

Upstox is a leading Indian financial services company that offers online trading and investment services in stocks, commodities, currencies, mutual funds, and more. Founded in 2009 and headquartered in Mumbai, Upstox is backed by prominent investors including Ratan Tata, Tiger Global, and Kalaari Capital. It operates under RKSV Securities and is registered with SEBI, NSE, BSE, and other regulatory bodies, ensuring secure and compliant trading experiences.

SUMMARY

Term insurance is popular for its affordability and high coverage, often up to 1000x the annual premium. However, many question its value since it benefits only their families. Given the typical Indian consumer mindset of saving money, online term insurance has gained traction for offering similar benefits at lower costs. To secure the best deal without compromising coverage, consider key factors that help reduce premiums while ensuring financial protection for your loved ones.

Prefer Online Mode to Buy Term Insurance

Buying term insurance policy from traditional or online modes is a personal preference. However, there are multiple benefits of buying it online from a reliable platform like Upstox. Besides getting the assistance of a data-driven term insurance calculator (to help calculate your adequate coverage and tenure), 24*7 expert customer support, and claim assistance, buying online gives you the cost advantage.

You might wonder why buying term insurance online can be cheaper even if it provides better insights, comparisons, and customer support. Unlike traditional offline purchases that involve agents or intermediaries, online policies are sold directly by insurance providers, eliminating commission costs and reducing overall premiums. This D2C approach ensures that the eventual cost of operations is lower and such benefits are further passed on to the customers.

In addition, there are so many insurers who offer discounts while buying online, such as lower premiums for non-smokers, rebates for opting for longer policy terms, or discounts for salaried professionals. The entire process is paperless, and client onboarding is quicker, especially due to the Aadhar-based KYC process.

Choose Annual Premium Payments

Choosing an annual premium depends on your personal financial planning and funds availability. One of the benefits of term insurance is the flexibility of premium-paying terms. However, making an annual premium payment can have multiple benefits. First, the administration charges and processing fees are lower. Therefore, the total premium is almost 2-5% lower than the monthly option. Second, it minimizes the risk of missed payments, ensuring uninterrupted coverage.

Hence, if you look at the long-term picture, paying the premium annually is better than other alternatives.

Other Tricks and Lifestyle Changes to Save Money on Term Insurance

Besides buying your policy online and choosing an annual mode for premium payment, there are a few more things that you can try. These things can not only help you save money while buying or renewing your term insurance policy, but they can also help you lead a healthy life:

Key Factor	Explanation
Maintain a Healthy Lifestyle	A healthy lifestyle directly impacts term insurance premiums. Non-smokers typically pay lower premiums than smokers, as smoking increases health risks. Regular exercise, a balanced diet, and routine health check-ups can improve your medical profile, leading to better premium rates.
Choosing the Right Policy Term	Selecting the right policy term ensures you are covered for the necessary duration without overpaying. Align the term with key financial obligations like mortgage payments or your children’s education. Avoid unnecessarily long premium-paying terms and link them with your life’s important milestones.
Compare Policies and Insurers	Comparing term insurance plans across multiple insurers helps you find the most cost-effective option. Online platforms make this process easier by displaying premium rates, benefits, and features side by side. Look for policies with competitive rates, high claim settlement ratios, and a robust customer support system. You should also check for a lower complaint ratio.
Choose Riders Wisely	Do not opt for riders that would not add value to your term insurance policy. For example, taking an accidental death benefit rider may not be necessary if you work remotely. However, if you travel frequently for work, such an add-on is advisable.

Summing Up

Term insurance is a pure protection plan with no returns on the premium paid. Its cost-effectiveness and flexibility make it a perfect tool for attaining long-term financial goals. However, you must ensure that your plan is cheapest and provides adequate coverage. You can try different things to keep the cost in check. Some of the most effective ways include opting for online policies, choosing the right policy term, comparing plans, and maintaining a healthy lifestyle can significantly reduce premiums.

FAQs

How can I reduce my term life insurance premiums?

Maintaining a healthy lifestyle, such as not smoking and managing a healthy weight, can lead to lower premiums.

Is it cheaper to buy term life insurance online?

Yes, purchasing term life insurance online can often be more cost-effective due to the elimination of intermediary commissions.

Does paying premiums annually save money?

Opting for annual premium payments can save you money by avoiding additional fees associated with more frequent payments.

How does comparing policies from different insurers help?

Shopping around and comparing policies can help you find the most cost-effective option that meets your needs.

About Author

Upstox Desk

Team of expert writers dedicated to providing insightful and comprehensive coverage on stock markets, economic trends, commodities, business developments, and personal finance. With a passion for delivering valuable information, the team strives to keep readers informed about the latest trends and developments in the financial world.