Three ways to reduce life insurance premiums
- When purchasing a life insurance policy, you have the option of paying premiums in a variety of ways - annually, half-yearly, or monthly. Lump sum payments can done if desired
NEW DELHI: The cost of insurance premiums should be seen as an investment, which enables your and your family's safety during uncertain times. Hence, you should be smart enough to choose the right policy, one which not only helps you save on premium cost but also provides adequate coverage.
If the cost of insurance premiums has ever influenced your decision to purchase a life insurance policy, here are different ways which can help reduce your insurance premiums and not burn a hole in your pocket.
Begin when you are young
Your age has a direct bearing on the premium amount, the younger you are, the lower your life insurance premium will be. Starting young is the key to low life insurance premium. Sajja Praveen Chowdary, head-term life insurance, Policybazaar.com said, “Simply put, if you purchase your policy as soon as possible, you will be eligible for lower premiums than if you wait until you are older because there is less risk associated with a young policyholder. The higher your age, the higher your premiums will be. It is highly recommended that you purchase a policy in your early 20s to save money on your premiums.”
"For instance, if you purchase a term insurance policy at the age of 25, it will cost you between Rs600 and Rs800 per month. Alternatively, if you buy the same policy at a later age, say at the age of 40, it will cost you around Rs1300-1400 per month. As a result, don't wait any longer; simply purchase the appropriate policy at the appropriate age," Chowdary explained.
Select the premium payment mode option astutely
When purchasing a life insurance policy, you have the option of paying premiums in a variety of ways - annually, half-yearly, or monthly. Premiums can also be paid at one go if desired. Your policy will most likely lapse if you choose monthly premiums as your payment method and do not pay them on time. As said earlier, some insurance companies allow policyholders to pay a lump sum premium, which could result in a discount.
For a 30-year-old male, non-smoker living in a metro, there are price comparisons of term Insurance offered by four major insurers. The total sum assured is Rs1 crore, with a 60-year coverage period. The idea is to compare all premium payment options on one platform, which can be monthly, annually, or even a single premium paid all at once.
Maintain a healthy lifestyle
If you maintain a healthy lifestyle, your premium payout will be lower. Insurers pay special attention to the medical history of the policyholder. Lifestyle ailments like blood pressure and hypertension can increase the premium amount. Hence, it is important to maintain a healthy lifestyle.
“The irony is that when you most need life insurance—right after you've had health problems—you're least likely to get it or your premiums will be higher. Before issuing you a policy, insurance companies conduct a medical examination to learn about your medical history. The basis on which insurance companies set premium rates. This is due to the fact that insurers are well aware of life-threatening habits and will charge a higher premium as a result,” said Chowdary.
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First Published:15 Jun 2021, 02:33 PM IST
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