Life insurance is an essential addition to your financial portfolio for keeping your family secure in case of any mishaps to you down the line. There are many considerations to make while purchasing a life insurance policy, including the premium you will have to pay. The premium for life insurance policies differs based on their type, tenure, the sum assured, and the policyholder’s age and health conditions, among other things. Therefore, you must choose a plan that fits your budget, so you do not run into a scenario where you cannot pay the premiums.
This is one of the reasons that many people opt for buying an online life insurance policy, as it can offer slightly lower premiums. However, there are a few more things to be aware of to ensure that the premiums for your policy are low, and this article will help you understand them so you can save money on your life insurance plans.
Ways to Save Money on Life Insurance
Most people have budget constraints and want life insurance plans that are not costly and fit their budgets. Thankfully, there are plans suited to every individual and need in the industry today.
There are various ways by which you can not only save money on your policy but also reap more benefits from it. Here’s taking a closer look:
1. Start Early
Young professionals might think they can put life insurance on the back burner until they are in their 30s or 40s. However, this is the wrong approach to take. You can start your life insurance plan even in your 20s. While you may not have a high income at this stage, getting a policy early automatically means a lower premium cost. This benefit will be visible throughout your life since you started early. You get comparatively higher coverage for a lower premium amount in your 20s.
2. Select The Appropriate Tenure
What people generally do is that they start their life insurance plans late. And when they start, they choose a plan with a shorter tenure. This increases the premium, making it unaffordable for many people. While buying life insurance, you will see a variety of tenure options. Think carefully before choosing the same.
Long tenures have relatively lower premiums than shorter tenures, which have higher premiums. Thus, choose a long-term policy with lower premiums. With time on your side, you can also have the opportunity to accumulate more funds. A longer tenure may mean a long investment horizon (for Unit Linked Insurance Plans) or a vesting period (for pension plans), or more time to save (for endowment plans), depending on the type of policy you choose.
3. Go With Term Plan
Plenty of life insurance plans are available today, and you can choose as per your specific requirements. But if you want to save your money on premiums, then you should go for term life insurance. Term life insurance is a pure life insurance product which provides life cover to you for a specific term in exchange for premiums. They have no maturity benefit and are one of the most cost-effective insurance plans available today.
Also, term insurance plans have riders like accidental disability, permanent disability, or coverage against terminal illnesses. You can opt for these to extend your coverage if you wish.
4. Select A Plan With Coverage for your Spouse
If you are going to buy two separate plans for you and your spouse, then it will only burden your pocket. Today there are a plethora of plans available that cover the life partner of the insured person too. This will give you additional savings on your premium.
5. Compare Insurance Plans
This is one of the most important things to do. Do your homework before choosing a life insurance plan. Visit the official websites of the insurance companies and use a life insurance calculator to understand how much you will be required to pay for a certain coverage amount. After filing some required details, you will know about your premiums based on your information, premium payment type, tenure, and other factors.
You can find all these details in a few clicks and then compare various insurance plans to choose the best one.
6. Live a Healthy Lifestyle
Yes, it might sound out of place, but it is a very effective way to save money on life insurance premiums. Many insurance companies ask you to undergo a medical check-up, and then they decide the premium amount. If you have a healthy lifestyle, your premium costs can be lower.
These are some of the ways by which you can save your money on insurance premiums. The crucial thing is to do your homework on the plans available and what will be your expected premium outgo. You can then take strategic steps for higher cost savings.