Udaipur, April 9, 2025: When planning your finances, one of the smartest decisions you can make is securing a term life insurance policy. Not only does it provide essential protection for your loved ones, but it also helps you manage your taxes better. In a world filled with uncertainties, knowing your family’s future is financially secure brings immense peace of mind. But before buying a policy, it’s important to understand how much term life insurance costs, what influences that cost, and how you can actually save money while enjoying term insurance benefits.

What is Term Life Insurance?

A term life insurance policy is a type of life insurance that provides coverage for a fixed period (or “term”)—usually 10, 20, or 30 years. If the policyholder passes away during the policy term, the insurer pays a pre-decided sum assured to the beneficiary. This lump sum can help cover financial responsibilities like household expenses, loans, and education costs, or even future goals like marriage or business continuity.

Unlike other forms of insurance, term plans focus solely on risk coverage. That’s why they’re more affordable and accessible, offering high coverage amounts at a fraction of the cost of traditional plans.

Factors That Affect the Cost of Term Life Insurance

Term life insurance premiums are calculated based on several factors, including:

• Age: The younger you are, the cheaper your premiums. Insurance companies consider younger individuals to be lower risk.

• Gender: Statistically, women tend to live longer, so they often get lower premium rates.

• Lifestyle Habits: Smoking or tobacco use increases risk and raises your premiums.

• Health Conditions: Existing health issues can affect your premium cost.

• Coverage Amount & Term: A higher sum assured or longer policy duration will naturally come with a higher premium.

• Add-On Riders: You can customise your plan with riders like Critical Illness or Accidental Death benefits, which may increase your premium but enhance your protection.

How Much Will a Term Policy Cost?

Let’s take an example to understand this better.

Meet Aryan, a 30-year-old non-smoker working as a software engineer in Mumbai with an annual salary of Rs. 12 lakhs. He’s single and wants to secure the financial future of his aging parents. He chooses a Rs. 1 crore term life insurance policy for a term of 30 years, and since he is young and healthy, his premium is only around Rs. 10,000 per year.

Now, let’s see how this policy impacts his financial planning.

Save Taxes with Term Life Insurance

One of the biggest term insurance benefits from reputable brands like Aviva is the tax saving advantage it offers. Under Section 80C of the Income Tax Act, 1961, premiums paid towards a term life insurance policy are eligible for a deduction of up to Rs. 1.5 lakh per annum from your taxable income.

Here’s how Aryan saves:

So, not only does Aryan secure a Rs. 1 crore financial safety net for his family, but he also saves on taxes every year. Over 30 years, that’s a total tax saving of Rs. 75,000—enough to cover several premium payments!

How to Save More on Term Life Insurance

1. Start Early

Buying a policy at a younger age locks in a lower premium. A 25-year-old pays significantly less than a 35-year-old for the same sum assured.

2. Choose Online Plans

Buying term insurance online helps you skip middlemen and commission charges. Online plans are usually 10–20% cheaper than offline ones.

3. Opt for the Right Riders

Add-ons like Critical Illness or Accidental Death Benefit provide valuable additional protection. Choose only those that match your lifestyle or medical history to avoid unnecessary extra costs.

4. Maintain a Healthy Lifestyle

Non-smokers and individuals with no history of chronic illness often get discounted premium rates. A healthy lifestyle can result in long-term savings.

5. Annual Premiums Over Monthly Payments

Paying annually instead of monthly or quarterly can fetch you better rates and eliminate extra processing charges.

The Long-Term Value of Term Insurance

Besides immediate tax savings, term insurance creates a long-term impact. Here's why it's one of the smartest financial decisions you can make:

• You know your family will be financially secure.
• Home loans, education loans, or personal loans won't become a burden for your loved ones.
• High cover at a low cost means financial discipline doesn’t become a burden.
• It aligns with your overall wealth-building strategy, especially when started early.

Conclusion

Buying a term life insurance policy is not just about preparing for the unexpected—it's about making smart financial choices today. With the right policy, you can secure your family's future while enjoying term insurance benefits such as tax savings, customisation, and peace of mind.

So, whether you’re a young professional just starting your journey, a parent planning for your child’s future, or a business owner with responsibilities to cover, term insurance is the invisible yet powerful shield your finances need.

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