Easy Tips To Save Money On Life Insurance Premiums

• Reduce taxable income by up to Rs. 1,50,000 deduction under section 80C**
• Convenient payment options - annual, half-yearly, quarterly or monthly premium payments
• Do more with plans that offer pure protection, retirement planning and investment options

On many occasions, cost can be a major deterrent when people think about taking a life insurance cover. However, with the entry of multiple companies into the life insurance market, most service providers have started pricing their products competitively. This has worked to the advantage of policyholders as they can now access life insurance at an affordable price. Along with the affordable price tag, the cost of life insurance can be brought down even further by following these simple tips.

1. Choose a term insurance plan

Life insurance comes in many forms. People can choose from term insurance, whole-life insurance, ULIPs, and endowment plans when they look for life insurance coverage. Term insurance is the cheapest among the options provided here. When it comes to providing pure life insurance coverage, a term insurance plan is the best option. However, there will not be any maturity benefits at the end of the term. Despite this minor downside, a term plan is the best option considering the cost-to-benefit ratio available here. If you have dependents, a term plan is best way to get access to a life cover at an affordable price.

2. Enter young

Irrespective of the type of life insurance coverage you choose, you must enter the cover at a young age in order to take advantage of the low price. Term insurance plans are at the cheapest when bought at a young age. Most importantly, the price of a term plan will not increase with age. For instance, if you enter a term plan at the age of 25 years, the premium amount will remain the same throughout the policy term even when you reach the age of 50 years (or more). Considering this, young entry age has its own advantage when it comes to saving money on premiums.

3. Do your research

There are about 24 life insurance companies registered with the Insurance Regulatory and Development Authority of India (IRDA). Each of these companies have their own list of life insurance covers in different forms. Almost all life insurance companies offer term plans as well as investment plans. Before you choose a specific policy, you must do your own research and figure out the best policy suitable for you. It is possible to find affordable life insurance coverage that fits within your budget by doing thorough research on the policies available in the market.

4. Maintain a healthy lifestyle

Most life insurers require a medical examination when you enter the cover after a certain age. Some life insurers may also require a medical examination when a high sum assured amount is chosen by the policyholder. The premium charges will be determined based on your health condition. Hence, maintaining a healthy lifestyle will benefit you by bringing down your premium costs. This is especially beneficial if you are entering a life insurance cover after the age of 45 years. Healthy lifestyle can help you save premiums irrespective of the type of life insurance coverage you have chosen.

5. Use the services of brokers only if necessary

Even after the advent of digital purchase options, insurance brokers still continue to operate in the market. Brokers can help you choose the right policy by helping you explore various options. On the downside, they may promote products on which they get higher commissions. They may also push you to choose a higher than required sum insured option. The commissions paid to a broker could also increase the cost of your life insurance policy. Hence, you must choose the services of a broker only if necessary. In this digital age, any information about a life insurance policy is just a click away. If you are confident about choosing the policy on your own, you can do your research and choose the best one available in the market.

6. Choose annual premium payment option

Life insurers in the market offer different types of premium payment options. For those who cannot afford a single instalment of yearly payment, there are options for paying premiums  on a monthly, quarterly, or half-yearly basis. However, these options often come with a cost as most insurers impose some additional charges. If you choose a monthly payment option, your premium is likely to be a little costlier. Hence, it is always better to choose the annual premium payment option if you can afford to pay that in one instalment.

7. Never forget to renew your policy

Forgetting to renew your policy can often turn out to be a costly affair. If the policy lapses, you may have to start over everything right from the application process. In this situation, you may have to pay the new premium based on your age. Hence, the overall cost of insurance could be extremely expensive if it lapses. Most insurers send reminders to their customers through email when it is time to renew a life insurance cover. All you have to do is to make sure that the policy is renewed on time. In case if you are not happy with a particular insurer, you can port your policy to another insurer in the market rather than letting it lapse.

Conclusion

The money spent on a life insurance cover must be viewed as a necessary investment rather than an expense. When choosing a life insurance policy, it is not a good idea to opt for the cheapest one in the market. Rather, choose a cover that matches your requirements and avail the best possible discounts using the above mentioned tips.