In this era of rising healthcare costs, life insurance is a necessity. However, life insurance is also pretty expensive. Regardless of how attractive and cheap it may appear from advertising; the fact remains that to afford quality life insurance you need a significant financial outlay in the form of life insurance premium. This is a periodic payment to the life insurance provider over the insurance term. Lapsing on premium payment may make your entire policy invalid and all previous premiums you have paid an amount to nothing. To avoid such a scenario, here are some tips and tricks to save on the amount of life insurance premium you have to pay in the first place.
Strategies to save on life insurance premium:-
Buy long term life insurance
Renewing a short-term life insurance over and over makes no sense when all it does is to make the premium payable increase each time. If the purpose of taking out life insurance is to leave money to heirs or dependents, consider buying a longer-term life insurance.
Buy low load policies
These policies do not have a barrage of hidden charges such as fees and agent’s commission. Rather, these allow a higher percentage of the premium paid to work for you immediately and therefore reduce overall premium costs.
Think before buying a guaranteed issue policy
Life insurance means the insurer will require you to undertake a medical examination. However, in case of guaranteed issue policies, no such medical examinations are required. This makes it riskier for the insurer and hence more expensive for you. If you are a healthy person, do not opt for such a policy.
Many online websites offer a handy comparison of various insurance policies, premiums payable etc. They are a useful information source which you can comb to zero in on the life insurance policy best suited for your purposes.
Take care of your health
Poor health and long-term health conditions make it much more expensive to purchase life insurance since they make the investment risky for the lender. If you suffer from heart disease, diabetes or blood pressure, your premium payable will skyrocket. Ditto if you are a smoker. Insurance companies have very strict parameters. In some cases, being overweight can increase your premium payable.
Buy what you require
Since you are buying life insurance to ensure that your family enjoys the same standard of living should anything happen to you, you need to calculate exactly how much is needed to maintain this standard of living. You may also have to factor in future costs such as children’s higher education or marriage.
Adding a rider to an existing policy can help you expand your coverage without having to purchase a new policy. Many life insurance policies have acceptable riders you can consider.
Buy life insurance early
Buy life insurance when you are young and healthy. The older you are, the more medical conditions you may develop and the higher will be your life insurance premium. As per Tata Capital, buying a life insurance policy at an optimal age can ensure cheap coverage for up to 30 years.
Apply for a revaluation if your health has improved
If you can prove improved health, you can get the insurer to reduce the number of future premiums chargeable. For this, you will have to produce authenticated medical records which show a steady improvement over time.
A good life insurance policy does not have to be an impossible dream. All it takes is a bit of planning and a bit of luck, so good luck!