Why is Term Insurance So Affordable?

All of us have several financial goals, but a common dream most of us share is securing the future of our loved ones. Term insurance plans can go a long way in achieving your financial goals. However, there is a general misconception surrounding insurance that it is expensive. In this article, we’ll discuss how and why term insurance is, instead, affordable and the factors associated with it.

What is Term Insurance?

As the name suggests – term insurance plans are valid for a specific ‘term’ or period. It means that the validity of the plan remains till the tenure of the policy. Insurance companies offer this life cover for a nominal periodic amount. This is called the ‘premium’.

Suppose the insured policyholder covered under the term plan meets with an unfortunate demise. Then, the insurer transfers the online term plan benefits to their nominees. It greatly benefits those who are the sole breadwinners of their families. These plans provide the much-needed financial assistance in case of an untimely event by transferring policy benefits.

Understanding How Term Insurance Plans Have Low Premiums

While you have to pay premiums periodically, several term insurance plans have low premium costs. Let us take a deeper look into how and why this is possible.

  • This is a pure life cover

Most online term plans can become pure life covers. They can get converted to insure you permanently for your entire life. This is universally one of the key reasons term plans have low premium rates.

  • Policies can be purchased online

When you choose to look for term plans online, it reduces distribution costs. Thus, the insurance companies generally pass on the benefits by way of lower premium rates. The online process is convenient, fast, and hassle-free. It involves relatively less paperwork and people costs, all of which contribute to a cheaper premium.

  • Usually purchased at a younger age

Once they understand the concept of a term insurance plan, most people lean towards making the wise decision of buying a policy or an online term plan while they are young. The possibilities of a young person losing their life are remote and significantly lesser. Hence, insurers offer these policies for relatively lesser premium prices.

  • Healthy lifestyle

Insurer companies closely examine your medical history and current lifestyle before finalising a policy premium. If you’re a smoker, you may end up paying a higher premium price than someone who does not smoke. To put it bluntly, this is because the mortality rates between a non-smoker and a smoker are vastly different.

Some more factors make term insurance plans affordable to the common man, such as:

  1. Absence of fund management charges

Online term plans have zero money management or portfolio-related expenses. Hence, insurance plans are different from money-backed plans. Term plans do not require funds that require investment or any kind of monitoring. Thus, it lets insurance companies offer a competitive premium to potential policyholders.

  1. Zero hidden comparisons

The process of buying term plans online gives you the option of comparing different plans offered by several other companies. You can use an online term insurance plan calculator to compare several quotes. Once the term insurance plan calculator gives you a fair idea about the total term cost and premium involved, you can see how well it suits your needs and budget.

The term insurance plan calculator is a great method to help you understand if additional benefits will cost you more. Should you make a move from your current plan, or upgrade? A term insurance plan calculator will help you make this decision using real-time, quantitative parameters.


Online term plans cover both anticipated and unforeseen expenses by providing your family with a large financial cover at a reasonable periodic investment. This keeps them secure even during your absence. Term insurance plans have also become quite affordable these days.

Use a term insurance plan calculator to see how this policy will fit in your budget. But with good health and the right timing, you can potentially unlock a pocket-friendly term insurance plan with low premium rates and a lot of benefits.

If you are looking to buy an insurance cover that suffices your basic needs and requirements without burning a hole in your pocket, term insurance plans are your go-to option.