A life insurance policy is an excellent protection plan that can ease your worries during these testing times. With a proper life insurance plan, you can ensure your family’s financial comfort in case of your absence. If you are worried about the cost, buying a term life insurance can be an affordable choice. A term plan costs less because it does not offer any maturity benefit. If your nominees make a successful claim before the policy’s maturity period, the insurance company pays the sum assured to them.
Even though a term plan is an inexpensive option, it does not mean you cannot reduce the price further. Read on to learn some great tips to help you achieve this objective.
Tips to Lower Your Term Insurance Premiums:
1. Invest early
The age and health of a policyholder determine the prices of term insurance plans in India. Insurance companies try to lower their risks when selling the term plan to an older person. Hence, it is understandable that they ask for a higher premium when the policyholder is not young and exposed to a greater risk of developing critical illnesses.
This is why it is wise to buy a term plan at an early age. When you are young and physically healthy, insurers will treat you as a less-risky candidate and offer a lower premium. You can even buy the best available term plan for a nominal price at a young age. Moreover, purchasing the term plan early allows you to opt for a long-term policy, which means smaller premiums over an extended period.
2. Select a longer premium payment period
One of the most important aspects of a term plan is its tenure. You have to be careful when deciding the policy term, as the plan must be in force until your retirement. The term insurance premium value depends on the tenure you choose. You may pick from multiple payment options, like one-time payment or limited period payment. However, the cheapest alternative is the long-term regular premium option.
In the case of a single or limited payment, you will have to pay a higher amount. If you choose to pay premiums throughout the term policy’s tenure, it will not cause any financial strain. You will be able to pay in small installments over many years.
3. Consider buying riders only if you need them
A term life insurance plan offers sufficient coverage at an economical price. Even though the death benefit is large enough, you can enhance it by adding riders. Every insurance company in India offers riders, which you can include in your existing term plan. With additional covers like critical illness and waiver of premium, you can ensure more comprehensive protection against the uncertainties of life. However, you will have to pay a little higher premium for the term plan if you wish to purchase riders.
This can be an issue if you are already concerned about the price. Thus, experts suggest that you opt for the riders that you need. Devote some time to determine which riders are necessary and which ones you can buy later or avoid.
4. Choose a longer payment frequency
Insurance companies in India offer multiple premium payment frequencies. You can select among monthly, quarterly, half-yearly, or yearly payment options. You can avail of a cheaper premium if you opt for a longer payment frequency. You can pay the premium monthly, as that will mean smaller amounts; however, paying yearly will cost you comparatively less. Hence, to opt for a cost-effective term plan, you need to take your time by analyzing the different options and determine which one seems more viable.
You can follow these tips to lower your term insurance premium significantly. Additionally, you can buy the policy from your insurer’s website, as online term plans cost even lower. You can perform a quick comparison among different policies and find a suitable term plan.