Life Insurance is a vital investment for everyone with an income. There is no better alternative to ensure that your family, your dependents are financially secure in case something unfortunate happens to you. The growing number of life insurance policyholders in India is a testament of this vitality, but there is still a long way to go. Insurance companies are always trying to accelerate this growth by making life insurance premiums affordable, but there are some things that you can do at your end to bring that life insurance policy within your budget and secure your loved ones’ future.
We are of course talking about lowering your life insurance premium just by following a handful of easy steps. Just to clarify, premiums that are once set cannot be altered for all policy types. In this article we will discuss how you can make sure that you get low premiums at the time of purchasing the policy. But for these steps to make sense, let us first understand what are the factors that influence life insurance premiums, for we will try and control these very factors in order to ensure lower premiums. Let’s start.
What Are the Factors That Influence Life Insurance Premiums?
Many elements go into determining life insurance premiums, and some people find it difficult to comprehend these charges and the reasons behind their own rate, which may differ from that of another. Many insurance firms take certain criteria into account when determining the cost of their plans; these elements might not be under your control. However, the decisions you make in life may also have an impact on the variables influencing the cost of your life insurance.
The factors that affect your premium towards Life Insurance are:
1. Your Age: This is one unsurprising aspect that influences your life insurance rate. The rates will be lower for younger people than for older ones. It is quite improbable that a young person may have a fatal illness or pass away when still very young.
2. Your Gender: As men and women are known to have distinct life expectancies, there might be a difference in premium amounts for both. Based on research and statistical data, women are thought to live, on average, five years longer than males (2.7 years in India). As a result, their premium might be affected, requiring them to pay it for a longer length of time but at a cheaper cost, which can be advantageous for women.
3. Smoking & Drinking Habits: Drinking and smoking increase the policyholder's risk of developing any illness, therefore engaging in either of these behaviors is equivalent to sounding an alarm with the insurance providers.
4. Your Medical History: A policyholder is more likely to get major illnesses from a hereditary standpoint if they have a medical history of cancer, heart disease, or any other sickness. which results in a higher premium rise for the individual than if their gene pool wasn't.
5. Your Profession: Your occupation has a significant impact on the premium you ultimately pay; policyholders who work in the mining, oil and gas, fishing, or any other hazardous professions must pay higher premiums for the policies they choose to purchase.
6. The Specifics of the Policy You Buy: The policy itself has an impact on the premiums you pay as well; the longer the policy's term, the higher the benefit amount at death because you are paying for that duration of time. Long-term insurance usually comes out to be less expensive than a short-term insurance.
How to Reduce Your Life Insurance Premiums?
This can be done through various acts or omissions that will ensure that the premiums of your life insurance are reduced.
1. Buying Life Insurance Early: Yes, it is as simple as that to start with. The recommendation is to buy life insurance early in your professional life so that low premiums can be availed for a longer tenure.
2. Reduce Your Drinking and Smoking Habits: If your goal is to reduce your life insurance costs, ceasing smoking and drinking for a minimum of 12 months prior to acquiring life or term insurance in India could be beneficial.
3. Disclose Any Pre-Existing Conditions: Any pre-existing conditions that relate to health ought to be disclosed.
4. Policy Term or Coverage Amount: Personalise your term or coverage amount to manage the premium outgo. However, make sure the term and coverage amount are reasonably proportionate to provide for your family in your absence. In addition, it affects the cost depending on the term over which one pays premiums. Paying the premium in periods that are shorter than the regular payment period typically increases the premiums. Opting to pay for a longer period than the regular policy term will result in reduced costs on your end.
5. Choose The Right Life Insurance Policy: You have to be very careful in analyzing which type of insurance policy will be suited to your situation.
6. Consider Occupational and Hobby-Related Risks: The nature of your job can influence the cost of your life insurance premium. It is important to note that insurance companies in India, according to their terms and conditions, may increase the premium amount for your insurance, reduce coverage, or even deny coverage if their terms and conditions are violated. To decrease your premium costs, opting for a safer occupation and steering clear of risky hobbies could be advisable.
7. Compare Offers of Various Insurance Companies: The market has a spectrum of leading Insurance providers who offer life insurance with different rates and benefits. Check out the offers and compare the proposals of different insurers based on premiums, coverage, benefits, and additional riders before finally deciding upon which policy to buy.
8. Compare Online Vs. Offline Premium Prices: At times, it is cheaper to buy policies online rather than offline. Make sure you compare the premiums for both modes of purchase before buying.
Conclusion
Once you secure life insurance coverage at the lowest possible premiums (as per your risk assessment by the insurer), the job is half done. You can now focus on paying the premiums on time and periodically assessing whether your life coverage is sufficient for your present needs or not. For comprehensive life insurance plans that are affordable and flexible, visit the website of Edelweiss Tokio Life Insurance and find the right policy for your needs, from term plans to new-age ULIPs to Guaranteed Income Plans.
