Buying a term policy for your family? Know the sure-shot ways to reduce your premium
Life insurance is unquestionably one of the best ways to secure your family’s future in case of an unexpected tragedy. In fact, it is regarded as the most important investment since it provides a safety net in the form of a sum assured to the insured person’s family members following his or her unfortunate death thus, ensuring the family’s financial security. Considering this decision of yours involves your family, you need to be extra smart in choosing the best term policy and at the same time, you should also have adequate knowledge on how to save on your premium cost. To help you understand better, below are the following considerations that you should keep in mind when purchasing a life insurance policy:
But first, what is the term insurance premium?
Term insurance premiums are nothing but the cost which the policyholder bears to get continued coverage. To continue receiving life insurance coverage, you must pay a term insurance premium. However, how much you end up paying depends upon a variety of factors.
How to Reduce the Term Insurance Premium Cost?
A policyholder’s term insurance premium rate is influenced by a number of factors, as previously mentioned. Though certain factors are beyond your control, there are a few basic things you can do:
Buy insurance at a young age: It is recommended that one should buy a term policy as soon as he or she begins earning money. The lower the age, the smaller the premium will be because the premiums for your insurance coverage rise with age. Thus, if you want to avoid paying higher premiums, it is best to obtain insurance when you are young. You can use the term insurance premium calculator to see for yourself how age influences the insurance premium one ends up paying.
Choose the term policy tenure carefully: The duration of your policy is a crucial factor in deciding the amount of premium you will pay. When purchasing a life insurance policy, it is important to understand the duration you and your family need the coverage for. The longer the duration of your coverage, the lower the premium. For example, if you are a salaried person, it is advisable to obtain coverage until the age of 50-60 years so that you can easily fulfill all of your commitments. To know how much it will cost you, you can use the term insurance premium calculator.
Stay fit and healthy: Your health has a direct impact on the premium charged by any insurance company. Nowadays, insurance firms pay too much attention to the policyholder’s medical history. An individual with a long history of illness, such as diabetes or heart disease, poses a higher risk to the insurer. As a result, the premium rate for these policyholders may be higher than that of a healthy individual. In certain circumstances, the coverage may be refused for medical reasons. As a result, the remaining fit has several advantages, one of which is not having to pay an additional premium to insure yourself. With these considerations in mind, you should purchase term insurance online while you are still young and healthy. When you first start a job, your health and age are normally in your favour, therefore now is the time to purchase term life insurance.
Quit smoking: Insuring a heavy smoker is a risky business for a life insurance company because the chances of them claiming it increase manyfold. This is why term life insurance premiums vary significantly between non-smokers and smokers and the same can be known using the term insurance premium calculator. The classification is based on either the policyholder’s disclosure or a urine cotinine test. So, if you smoke on a regular basis, you are at a higher risk of developing health problems and must pay a higher premium than others.
Buy term insurance online: You can save a lot of money by buying term insurance online. It is because insurers do not have to pay commissions to brokers and agents when selling online term insurance policies and thus, they can pass on the savings to clients in the form of lower term insurance premiums. You should use a term insurance premium calculator to compare different term policy offered by the insurance companies.
Compare plans before purchasing a plan: This is another key factor to consider when purchasing a life insurance plan. Never make a decision to acquire a plan based on advertisements or recommendations from relatives or close friends because everyone has different needs and wants. After examining various plans, you can select one that provides adequate coverage at a reasonable cost.
Pay your premiums on time: It is best to pay your premiums on time. If an insured person does not pay his or her premiums on time, a late premium fee will be levied, increasing the amount of your premium.
Do not include unnecessary add-ons: Many insurance providers provide additional coverage at an additional cost. Remember that extra protection comes at an additional expense. As a result, you must examine your needs and select only the riders that you truly require. This will assist you to reduce the amount of your premium.
So we are saying
Whether you acquire a term policy online or offline, you can pay on an annual, half-yearly, quarterly, or monthly basis, depending on the terms and conditions of the policy. However, the cost of the premium is directly proportional to the number of times you pay each year. In that situation, paying a monthly premium will cost you more than making quarterly payments. As a result, quarterly payments are more expensive than semi-annual payments, annual premium payments are the most affordable. When you choose the annual premium payment mode, you get the maximum value for your money. One can use a term insurance premium calculator to find out whether to pay quarterly, monthly or semi-annually.