Buying one of the best term life insurance in India early on in life is a great investment since it provides you with a financial safety net. It provides its benefits only for a certain period, hence the name term life insurance. At the same time, if the policyholder meets an unfortunate end while the policy is still active, then a death benefit is paid to their nominee.

While premiums are a key component of these policies, they may not always remain constant. Sometimes, the premium could increase at renewal. Factors like age, health conditions, and policy adjustments can lead to this increase. However, what can you do at such a time?

Read on to understand the options and solutions to deal with this situation effectively.

Steps to Take if Your Insurance Premium Increases Suddenly

Here are all the things you could do when there is an increase in the premium of your best-term life insurance in India.

Find out Why the Premium Increased

Your premium could have risen for a variety of reasons, whether it was due to changes in health conditions, policy terms, or age-related risks. You can check your renewal notice and talk with your insurer to understand the reason behind the hike.

Check Your Policy Benefits

You can compare your current premium with the benefits you are getting. Is it worth the cost and covering everything you need? Ensure that the extra premium is not outweighing the policy’s value.

You can check how much your current premium has increased compared to your previous premium. You can make your estimations using the term plan calculator if needed.

Look at Other Options from Your Current Insurer

Sometimes, a few insurers provide alternative policies or flexible options. Ask your insurer if there are plans with adjusted coverage or lower premiums that still meet your needs. If you find something like that, consider moving to the other policy.

Compare the Policies

If you do not find anything suitable with your current insurer then you could look at other term life insurance in India. There are several options in the market, and you could compare your current policy with any of them to see whether you could pay a lower premium and get the same benefit.

Analyse Your Life Insurance Needs

At this point, you can reassess your financial liabilities, responsibilities, and dependents. Understand whether your financial obligations have been reduced in any way. If they have, then consider going for a low coverage premium to manage the high amount.

Negotiate with Your Insurer

If none of the above options work for you, then you could always try negotiating with your insurer. Some are willing to hear you out. So you could negotiate for better terms or even ask about discounts, claiming that you have a good record.

Summing Up

Your insurance premium payment could increase at any point. However, it's essential to ensure you are receiving adequate coverage for the premium you pay. If you find the premium for your current policy to be excessive, you can always go for a different scheme under the same insurer to see whether that would reduce your premium amount. Remember, it is always important to choose the best term life insurance in India that will fit your needs as well as align with your budget.

FAQs

1. Why do the term insurance premiums increase after renewal?

The premium may rise due to the policyholder’s age or health condition. It can also be due to their smoking habits, payment tenure or lifestyle habits. The actual reason is different for everybody, so it is best to inquire directly from your insurer.

2. How do I ensure that my premium does not increase from beforehand?

There is no guarantee that your premium will increase in the future or not. The premiums can increase simply due to time, even if you have the best term life insurance in India. However, there are still some things you could do while getting the insurance. You could consider getting your term plan at a young age since the premium tends to rise as your age increases. You could also pick a longer policy tenure to have low premiums since a short tenure generally leads to a higher amount.

3. How much sum should I put under my term plan?

There is no fixed sum that you could put for your term plan since it differs for everybody. But as a rule of thumb, you could pick an amount that is tenfold your annual income. So, if you make Rs. 20 lakhs a year, then you could pick a cover of at least Rs. 2 crore.

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