People always keep looking for various ways to reduce the price which they pay to buy a product and if they are able to do so without compromising on the benefits, then it becomes one of the best deal for them. An economical deal with various benefits is what everybody looks for. The same thing goes for a term insurance plan which is considered as the most economical way to get life cover because of its low premium amount and high coverage. There are various ways in which you can reduce the premium amount of term insurance policy without comprising on the benefits.
Way to Reduce Premium Amount of Term Insurance Policy
look at the various ways through which you can reduce the premium amount of a term insurance policy.
1. Stay Fit
This is the first consideration to determine your premium. If you’re a healthy customer with an excellent lifestyle, it will make insurance companies consider you as a low-risk profile. This in turn makes them offer really low premiums for term insurance plans that work in your favour. Also, having a good health offers multiple benefits in other spheres of life too.
2. Avoid Smoking
Insurance companies know what can kill you and smoking is one of them. The premium amount of a term insurance policy is based upon the level of risk associated with the buyer and since the risk related to the life of smokers is high, insurance companies charge high amount of premium for them. That’s why it is better to avoid life-threatening habits like smoking and enjoy a low premium rates with a healthy life.
3. Start Early
Don’t wait to get sick or get old to value your life. Insurance has to be purchased when you’re fit for it and to come to your aid when you get old or sick and need financial support. It is better to start when you’re young to reap the benefits of term insurance. The younger you’re, lesser will be the insurance premiums. It is advisable to start with a term plan in early 20’s when you start working. You may opt for higher cover later in the future as per your growing financial needs and dependents.
4. Opt for Right Tenure
Its prudent to opt for the right term for your term policy. Term plans are taken ususally to provide financial protection to your family in the event of your untimely death. Plan the term accordingly where in your life’s financial objectives like kids education, marriage, repayment of debts are dealt with. As going for very large terms like till age 75 will make you pay more premiums.
5. Pay Annually
It is a lucrative idea to pay smaller instalments of insurance premium all through the year or on a quarterly or half-yearly basis. However, the companies give you discounted premium rates if you pay the premium in one go annually. This helps them to save on administration costs and gives them funds at one go to invest strategically.
6. Buy Simple Plan
A basic term insurance plans are good enough instead of going for unnecessary add-ons or riders on your policy which may not be required. Such offers also come at a price and that increases your premium. Be sure of the purpose for buying a term plan and then invest in one. You can buy a different plan for different needs that offer you more benefits compared to buying one plan with lesser benefits and higher premiums.
7. Buy Online
Online buying of term plans saves your money on premiums. Buying online there is no cost of agent, broker or other intermediary which the insurance company has to bear. So the company reduces that costs from the customer’s premium amount which makes the term plan economical and cheaper for customers. Also, there is no paperwork involved. Everything has to be done online from proposal form filling to payment of premium.
8. Add Riders According to Your Requirement
Riders can do wonders to your policy by widening your area of coverage but you should understand that riders don’t come for free. You need to pay an extra price for adding each rider and that extra cost gets added to your premium amount. Therefore, it becomes necessary to add only those riders which are required, so that you don’t’ have to pay extra premium for an unfruitful rider.
Follow above mentioned steps and there are chances you will be able to save a considerable amount on the premium outgo. A term policy is designed to give you maximum advantage at minimal cost to you. How to lower the cost further down depends a lot on your decisions. Act wise, save money!