A life insurance policy is increasingly becoming the need of the hour as more and more individuals are buying their financial security through a life insurance plan. However, whenever a life insurance plan is considered, the premium outlay of the plan is given the most prominence. What would be the amount of premium payable, for how long and what benefits would the plan fetch are the factors which are weighed by a potential policyholder before he commits to an insurance plan. Though premium payment cannot be ignored, what if there are ways to save money on life insurance through lowering of the premiums payable? Sounds like music to your ears, doesn’t it?
There are ways in which you can save money on your life insurance policy. Here are some of the ways which would lower your life insurance premium thereby saving money.
- Buy Young – your life insurance premium is always determined by your age because age is directly proportional to the death risk which is covered by the plan. Higher the age, higher would be the risk of death and hence, the premiums would be higher. So, if you want to save money, buy a life insurance plan when you are young. The premiums would be low and also remain the same throughout the policy tenure, no matter how long.
- Choose a Higher Tenure of the Policy and the Premium Payment – policies which are taken for longer terms have a lower annual premium than policies of shorter duration. Similarly, premiums payable for the entire policy tenure would be lower than premiums payable for a limited tenure.
- Pay Annual Premiums – though insurers allow for monthly, quarterly or half-yearly modes of premium payments, paying annual premiums is always wise. Annual premiums are lower compared to other modes of premiums because a frequency loading is added to premiums paid in any other mode except annual mode.
- Pay Premiums on Time – there is a premium due date in your policy by which you are supposed to pay your premiums. After the due date is over, you are also allowed a grace period of 30 or 15 days within which you should pay your premiums without any additional charges. If the grace period expires, your policy lapses. Reviving a lapsed policy would not only involve payment of due premiums, but also an additional interest. To avoid this extra outgo and to save money, pay your premiums on time.
- Improve Your Lifestyle Habits – tobacco consumption or smoking has an adverse effect on your health which increases death risk and also the life insurance premium. So, curb down on such vices to enjoy lower premiums and save money. Your weight to affects your premium rates and if you are on the heavier side, try and reduce the excess weight to bring down the premium level.
- Shop Around – with about 28 or so life insurance companies in the market today, the products offered have more or less the same features in their class. Comparing life insurance plans and then settling on the best one is the best course of action if you want to save money.
- Buy Online – with the popularity of online medium among the Indian population, life insurance plans are also being sold online. These plans are sold directly by the insurance companies to the individuals and hence cut down on the middlemen costs. As such, online plans are always cheaper on the pocket and help to save money.
So, now you know how to save money on your life insurance policies and the next time you think life insurance is costly, think again!