A life insurance plan helps you navigate through the risks associated with life’s uncertainties and is certainly one of the best ways to take care of your family’s future should anything happen. The cost of your life insurance premium should be viewed as an investment in your future. Making a wise decision involves a combination of factors to not only look for a product that provides adequate coverage, but is also affordable and cost effective.
Although age is a factor, there are various other factors that insurance companies take into consideration that can affect your insurance premiums. Since age is not something you control, the only way to save on premiums is to start early in life. A healthy lifestyle can certainly work in your favor by ensuring a lower life insurance premium. To help you understand better, here are some rules of thumb you should keep in mind to save on premiums when buying a life insurance policy.
Read also | LIC announces relaxations for the victims of Cyclone Biparjoy
Do your research: Life insurance is not as simple as a consumer product bought and sold over the counter. You can’t change insurance every year. Each insurance company has its own terms and conditions, as well as techniques for determining the risks and liabilities associated with providing a certain plan to a specific person. Although this process is time-consuming, this method allows one to select the optimal plan for one’s current and future needs. One can also buy a suitable policy online to reduce the price of your life insurance. Since there is no third party involvement, buying a policy online is the most affordable way to get insurance.
Choose the ideal policy duration: The length of your policy plays a major role in determining the premium amount. The longer your policy is, the lower your premium will be. For example, if you are a salaried person, it is advisable to take out cover until the age of 50-60 so that you can easily meet all liabilities.
Informed decision on premium payment frequency: There are several ways to pay premiums when selecting a life insurance policy. This includes paying premiums annually, semi-annually, quarterly or monthly. Some insurance companies allow their customers to settle the payment in one go, which is usually less expensive than other payment methods. Instead of opting for a monthly premium payment, it is advisable to choose an annual payment as many insurers offer discounts, which lead to significant savings.
Compare policies before buying a plan: Depending on each person’s hobbies, profession, health issues and other factors, this could result in varying premiums for the same coverage. Therefore, it is strongly advised to compare insurance policies before making a purchase. Do not be swayed by advertisements or influenced by recommendations from family or friends. The right font should be chosen based on your needs and those of your family.
Start early: Growing inflationary pressures and global economic conditions continue to increase premium amounts. Considering this scenario, it is recommended to purchase the policy at the earliest. Apart from this, the age of an individual has a direct bearing on the premium amount, the younger one is, the lower the life insurance premium will be. It is strongly recommended that you take out a policy in your early twenties. The premium amount will depend on several variables, including the policyholder’s health conditions and how soon or likely one is likely to file a claim.
Maintain transparency: You need to be completely open and honest about your current medical condition. You must specify and document any pre-existing medical conditions you may have. Because it increases the risk to the company, many insurance companies charge higher premiums to applicants who have pre-existing conditions. When you take out the insurance policy, you must maintain transparency with the insurer.
Life insurance is one of the most important pillars of personal finance planning. It is advisable to take stock of your personal financial situation as well as your needs and responsibilities when choosing the life insurance policy. An individual needs to take action on some of the easy steps which have the potential to reduce their life insurance without any compromise in insurance coverage. By controlling the factors you can influence, you can try to become a relatively risk-free customer for a life insurance company, so that they are likely to charge you lower premiums.
(The author is the Distribution Manager at Edelweiss Tokio Life Insurance)