Life insurance is the most popular option when it comes to preparing for the future in case of any unforeseen circumstances. Even in the absence of a breadwinner, you can safeguard your family’s financial security with a good life insurance policy.
The monthly payment of premiums to keep the plan alive is an essential component of purchasing life insurance. The cost of life insurance is influenced by many variables. Even if you want to purchase term insurance, the most basic type of life insurance policy, you should understand how to lower the premium on a life insurance policy to save money.
*All savings are provided by the insurer as per the IRDAI-approved insurance plan. Standard T&C apply
Let’s first discuss the factors that affect the cost of life insurance before moving on to several strategies for lowering the price.
Factors that influence the cost of life insurance
1. Age
One of the key elements affecting life insurance premiums is the policyholder’s age. Young people in their 20s or 30s are less likely to get serious illnesses, and they are also more likely to keep the coverage for the foreseeable future. This lessens their responsibility to the insurance.
2. Family tree
It is common for certain inherited illnesses to be passed down to a family’s younger generations. Similarly to this, due to shared lifestyle decisions, members of a family may become more susceptible to certain diseases.
3. Health information
Individual medical histories, in addition to family history, are very important in setting life insurance premiums. Most life insurance companies underwriting procedures involve medical exams to determine your current state of health.
4. Gender
It does matter, despite being one of the under-appreciated elements affecting the cost of life insurance. Its significance is supported by statistics showing that women have a longer life expectancy than men. They become qualified for a longer period of policy tenure as well. To estimate the difference between life insurance premiums for men and women, utilise a term insurance calculator.
5. Smoking habits
There is an increased risk of developing serious illnesses like lung cancer, mouth cancer, and heart issues for anyone who uses or smokes tobacco. These behaviours have almost the same effect on both men and women. Smokers pay a higher premium for life insurance since they are more likely to experience health issues. In this situation, giving up smoking and adopting a healthy lifestyle are the greatest ways to minimise your term plan premium.
Methods for lowering life insurance premiums
1. Select a sufficient sum assured
The most crucial step after choosing a proper term insurance policy is to determine the appropriate sum assured. When you choose an adequate level of life coverage, the entire goal of purchasing term insurance is achieved. Reducing the sum assured is the simplest way to cut the life insurance premium.
2. Purchase term insurance when you’re young
Many people postpone purchasing term life insurance until they are at the appropriate age or stage in life. As a result, individuals must pay a larger premium than if they had purchased the same plan when they were younger. Purchasing a term plan early in your career is the appropriate approach to reducing the term insurance premium.
3. Before purchasing a policy, compare them.
This is still another method to lower the cost of term insurance, but it is frequently disregarded. Some consumers purchase a term plan without first considering their actual needs, relying instead on advertisements they come across or advice from others. You can get a better grasp of which plan meets your needs by comparing term insurance coverage and using a term insurance calculator. If cost-effectiveness is an issue, you can also compare the advantages provided by various plans in relation to the specified premium.
4. Refrain from choosing add-ons you don’t require
By adding more riders to the base policy, you can increase the advantages of a term insurance plan. Similarly, to this, you can add different add-ons to a base policy, such as Waiver of Premium and Return of Premium. The cost of these add-ons is in addition to the base policy premium. Therefore, choosing only the add-ons that you actually need and can afford is one approach to lowering your term insurance rate. This will assist you in learning ways to lower the cost of term insurance.
5. Buy online term insurance
Online term plan purchases are typically less expensive than offline purchases of term insurance. Insurance companies can reduce their distribution expenses because there are no insurance brokers and no commissions to pay. The lower-term insurance premium is a result of these savings, which are then passed on to policyholders. Simply purchase it online if you’re having trouble figuring out how to reduce your term plan’s premium.
Your grasp of the merchandise will guide your decision regarding an online term plan. Therefore, it is advised that you learn more about the policy specifics before purchasing any plan.
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.
Understanding ways to reduce life insurance premiums can benefit homeowners at the mortgage closing stage. Lower premiums free up financial resources for mortgage payments, making homeownership more manageable. Smart insurance choices contribute to better financial planning, ultimately facilitating a smoother and more affordable mortgage closing process.
