Term Life Insurance Across Borders: Comparing Cost in India and the USA

In this article we compare the cost of term life insurance in the USA and India.

Use case

We consider a 40-year-old male opting for a 30-year term with coverage of 500,000 dollars or 4 crore rupees. The individual is assumed to be in very good health at the time of purchase. For simplicity, we use an exchange rate of $1 = 80 rupees.

Cost in the USA

A quote from AIG Corebridge, one of the leading providers of term life insurance, shows a cost of $52 per month. This policy includes the Accelerated Death Benefit rider, which provides living benefits for chronic, critical, and terminal illness.

Cost in India

A quote from Policybazaar, an aggregator that compares plans from multiple insurers, shows the cheapest option for 4 crore rupees at 5,302 rupees per month. Converted into dollars, this equals $66.

Concluding Thoughts

Term insurance in the USA is about 23% cheaper compared to India. The quote from India does not include chronic, critical, or terminal illness benefits, while the AIG policy includes them by default. This makes the difference in value even greater.

Many individuals on temporary work visas in the USA assume they can wait until returning to India to buy term insurance. In reality, it is often smarter to purchase in the USA at the lower price, then reduce the coverage and premium before moving back to India. Many insurers allow such adjustments.

That’s a wrap for this week. Happy learning!