Now that you’ve got a fair idea about the basics of life insurance policies, let’s move on to discuss how to get the maximum benefit from your life insurance policy by paying the least possible premium.
How to save money with your life insurance policy?
1. Age: The younger you are when you buy life insurance, the lower will be your premium.
2. Policy tenure and sum assured: The longer the life insurance policy term and the higher the cover opted for, the higher will be your premium. With a higher life insurance premium, you will be eligible for a better coverage. If you want to cut down on your life insurance premium, you can consider a plan of a shorter tenure.
3. Lifestyle habits: Lifestyle habits like excessive smoking and drinking impact your health negatively, thus, increasing the premium that you will be eligible for. Having a family history of such diseases also increase the premium on your life insurance. This is because you will need a comparatively higher coverage for your unhealthy lifestyle practises.
However, you can save on your premium by maintaining a healthy lifestyle for a considerable period of time to improve your medical parameters. This will enable you to negotiate with your insurer regarding your premium.
4. Current health condition: Pre-existing medical conditions like cancer, diabetes, etc. automatically increase the premium on life insurance policies. Not just that, incorrect or concealing any information regarding pre-existing diseases also has the same effect on your premium.
5. Add-on riders: You can enhance your base life insurance plan by adding riders at an additional cost since these riders are not compulsory, you need to select them with discretion. Sometimes, individuals tend to opt for all the available riders, despite their need for each one of them. Select only the ones that suit your unique needs to save on unnecessary premium payments.
6. Premium payment frequency: The options for premium payment frequency that are generally offered are single payment, annual, bi-annual, quarterly and monthly. Single and annual payment options bring down your life insurance premium as you save on the administrative charges that are applicable on the other premium payment frequencies.
7. Online purchase: Online life insurance plans are available at a lower premium because it excludes the commission charge of the insurance agent as well as insurer’s administrative charges, which becomes applicable for life insurance purchased online. Such online plans are increasingly becoming more popular with most leading insurers offering their customers the convenience of buying a life insurance through their websites.
Financial Benefits of a Life Insurance Policy
Let’s take a glance at the financial security offered by a life plan.
Helps you to be financially prepared for planned and unexpected exigencies well in advance.
Offers either Death Benefit or the dual advantage of Death Benefit and Maturity Benefit.
Death Benefit is payable to the beneficiary of the policyholder on his/her demise during the policy tenure.
Maturity Benefit implies to the sum assured, along with bonuses, which is payable to the policyholder on the maturation of the policy tenure.
While term life insurance offers only Death Benefit, whole life insurance policies offer a combination of both. You can opt for either of them as per your insurance objectives.
Keeps your family financially safe, even if you are not around. It not only provides for their daily expenses, but enables them to repay loans (if any) and fulfil their future ambitions and aspirations.
Here are 3 simple rules to help you choose the right plan.
Meets your objectives: Are you looking for Death Benefit only? Or, both Death Benefit and Maturity Benefit. Buy your life insurance accordingly.
Type of payout: The payout that best suit your requirements depend on your objectives. If you are looking for financially securing your family in case of your sudden death during the policy term, term life insurance policy should be your choice. In case you want a life insurance policy that will cover you for your entire life, whole life insurance policy is the way to go.
To wrap it up…
