5 easy ways to reduce your life insurance premium
The life insurance industry in India is the largest in the world with about about 360 million policies! But this is still the tip of the iceberg considering our huge population of over a billion people. Insurance is also growing as a medium of savings for Indians. Projections show that by the end of 2020 about 35% of total savings will comprise of life insurance as compared to 26% in 2009-10.
Insurance makes life easy by taking the stress out that stems from the unpredictability of life. But when it actually comes to taking a policy, most investors tend to get confused with an overload of information and overwhelmed with the premium amount. If the costs associated with insurance premiums have deterred you from purchasing a much needed policy till now then this article might be able to help you with some tips that can bring down such costs considerably. These pointers will get you insight into how premiums work. Once you have that knowledge you can definitely lower your premium amount, nothing should stop you to go ahead and secure your life.
- Get a life cover now!
It is highly recommended that a person starts investing in an insurance policy as soon as he is earning enough to meet the premium amount. Younger age commands lower premiums because of longer productive life, good health and the lesser risk associated with a young policyholder.
That is why the best way to lower your term plan premium is to not delay the purchase of a term insurance plan. The older you get, the costlier the premium. An average delay of 5 years in buying a term plan could cost you Rs. 1,47,495 more than what you would pay to get insured today!
- Determine the Right Duration
The tenure of an insurance plan can also make a difference to the premium amount. Some people apply for the cover for the longest duration possible, even if it is not required. Rather, an insurance policy should cover you till the time you intend to earn. As long as you are protected during your earning years, you can apply cover for a shorter duration. This will ensure that you don’t shell out too much money towards premium unnecessarily especially after you retire and you no longer have a steady source of income.
- Buy Online
It is a well established fact that buying online insurance is far cheaper than offline policies. The online term policies, in particular, are about 30-40% Since the cost of sale for an online insurance is an inexpensive affair for the insurance company owing to the elimination of advisor commission and various other administrative costs, the benefit gets transferred to the policyholder in the form of lower premium.
- Invest in Your Health
And we do not mean hospital bills here, but your insurance premium. A fitter and a healthier person gets affordable premiums to pay. Lifestyle diseases such as diabetes, hypertension and blood pressure increases the premium amount quite significantly. Same is the case with habits like smoking and drinking that would demand more premiums since they are high risk factors.
- Pay on time
It is important that a policyholder makes timely payment of premium. In case a policy holder does not make his/her payments on time, late payment fees can be added which increases the cost of the policy. A few companies may even request you to undergo a medical test. Just in case, the medical test reveals an adverse health condition, you may end up paying more than the regular premium. Another reason you should pay timely premiums is to avoid a defaulter tag which can ruin your financial standing when taking a policy in the future.
If given some time and thought, a life insurance policy need not burn a hole in your pocket. The right information and research can save you thousands on premiums.