Mumbai (Maharashtra) [India], March 17: Life insurance is a vital source of money that brings you and your family peace and security. Probably the biggest concern of most people about the premiums is cost. While the cost seems to be too high, there are easy and innovative ways to save on the cost without reducing the cover. Here’s a step-by-step how to save on life insurance premiums easily and pragmatically for everyone, even young adults.
Know Your Needs First
Take a few minutes to consider why you are looking for life insurance before you begin shopping. Are you keeping your family from having to pay bills, covering debt, or funding your kids’ education? Your individual needs will dictate the right type of policy and level of coverage so you don’t overpay for frills that you don’t require.
Use Tools for Accuracy: The easiest way to estimate your coverage needs may be through using a term insurance premium calculator. It allows you to put in details like your age, earnings, and the level of coverage you wish to calculate your premium. Knowing what you need saves you from spending on unwanted coverage.
Start Early
Age is a significant factor in determining life insurance premiums. The sooner you purchase, the lower your premiums. That is, since young individuals are healthier and pose less risk to insurers. If you are in your teens and early twenties, the sooner you purchase an affordable rate.
Choose Term Life Insurance
Term life insurance tends to be less expensive than whole life insurance. With term life insurance, you’re insured for a specified term, like 10, 20, or 30 years. Because it’s a bare-bones policy with no investment component, it will cost less. If you need life insurance only to replace income in case of death or to cover the payoff of your mortgage or student loan obligations, term life insurance might be a smart and economical choice.
Compare Policies Online
The Internet is your greatest friend when you want to save life insurance premiums. Comparison web sites of varying policies allow you to compare a group of policies at one go. Depending upon premium cost, cover, and insurance company reputation, you make your decision.
Seek Discounts: Certain insurance firms offer discounts on a package of policies, including life insurance along with automobile or home insurance. Don’t forget to ask for these while comparison shopping.
Be Healthy
Your health is crucial in determining your life insurance premium. Insurers will generally conduct a medical examination to determine your level of risk. Being healthy will mean paying lower premiums. Here’s why:
. Quit Smoking: Smokers cost considerably more than non-smokers. Stopping smoking will save your health and your wallet.
. Exercise Regularly: Exercise reduces the risk of long-term illness, which can lower your risk profile.
. Eat Well: Good eating keeps a healthy weight and helps prevent diseases like diabetes and high blood pressure.
Choose a Higher Deductible
Certain plans allow you to choose a higher deductible, and you pay more out-of-pocket occasionally but less in premiums overall. If you’re comfortable with your money, this is an excellent way to save.
Pay Yearly Instead of Monthly
Monthly premiums are handy, but most companies charge a premium for the convenience. Paying your premium every year can save you money down the road.
Re-evaluate Your Policy Periodically
Circumstances in life change. If you’ve paid off a loan, your kids are now financially independent, or you got a raise, you need to review your life insurance requirements. Changing your coverage can mean cheaper premiums.
Bundle Policies
If you have already car or home insurance, call your provider to find out if they have a multi-policy discount. Many firms give reduced rates to long-time customers for maintaining more than one policy.
Improve Your Credit Score
Your credit record can influence your life insurance premium. Good credit reflects well on your money management, and insurance companies consider this a lower risk. Work on having better credit through paying bills on time, staying out of debt, and checking your credit report for errors.
Avoid Over-Insuring
It’s a temptation to go for a large coverage amount so that your dependents are comfortably covered, but over-insurance will lead to unnecessarily high premium payments. Go for the appropriate amount of coverage depending on your income, loans, and long-term financial goals.
Search for Group Insurance Plans
Group life insurance is sometimes offered by employers as an additional benefit. Group plans cost less since the risk is spread across a group. Group insurance, although might not be sufficient by itself, can be an affordable supplement to your policy.
Choose the Appropriate Policy Term
When selecting term life insurance, select the policy term wisely. For example, if your intent is primarily to cover your mortgage, use a term equal to the loan’s balance. The shorter terms will cost less.
Research the Insurer
Choosing a solid insurer can even help you save cash in the end. Choose insurers with solid financial strength ratings and solid customer reputations. A solid insurer isn’t likely to jack up your premiums overnight or leave you out of the loop about extra charges.
Use Technology
New technology has revolutionized the insurance industry. The majority of insurers offer policies that can be accessed via apps by which you can track your cover, renew policies, or even claim with a few clicks. Other apps even reward you for healthy habits as incentives, like reaching daily step goals or attending health check-ups regularly.
Be Wary of No-Medical Exam Policies
While policies that don’t require a medical exam are convenient, they often come with higher premiums. If you’re in good health, opting for a traditional policy that includes a medical exam can be more cost-effective.
Lock in a Rate
Insurance rates increase with age and ill health. Should you find a policy with excellent terms, lock in the rate. Most insurers allow you to convert a term policy to whole life insurance without you having to undergo a subsequent medical exam, so your rates are locked in.
Don’t Buy Riders You Don’t Need
Riders are voluntary add-ons to your policy that provide additional benefits, such as accidental death coverage or critical illness protection. Not all riders are necessary, however. Consider your needs closely and don’t waste money on features you won’t use.
Be Honest on Your Application
While it is tempting to conceal facts from the insurance company to maintain your premium at a low level, dishonesty can sometimes bite back. Insurers also verify facts when they settle claims, and inconsistency can lead to denial of benefits. Honesty will have you and your loved ones covered in times of extreme need.
Seek Professional Advice
Finally, don’t hesitate to consult a financial planner or insurance expert. They’ll guide you through the intricacies of life insurance and help you select the perfect policy for your needs and budget.
Conclusion
Saving life insurance premium does not have to be a daunting task. If you start early, remain healthy, and adopt steps such as a term insurance premium calculator, you can invest in a policy that is within your means without compromising on cover. Regular review of your policy, comparison of policies on the internet, and taking discounts can also help save money.
