Life insurance policy is must to have for every individual. However, it is a win-win situation if you get the right type of insurance plan at a low-cost. While purchasing a life insurance policy in India, it is possible enough that the plan you choose may be ‘cheaper’ but not really be what you want. Thus, at the time of zeroing in on a policy, it is important to choose an affordable plan without compromising on the cover you need.
As your brainstorm on how to reduce the cost of the life insurance policy without compromising the coverage, here are the other important things that you should consider in that process.
- Don’t Over Insure Yourself
In order to keep the cost down, some insurance buyers don’t buy sufficient cover. That’s wrong because it leaves your family in a fix in case they have to make a claim.
Similarly, it’s a mistake to over-insure yourself. Remember, that your family needs financial protection; they don’t need the amount correspondent of a lottery win.
Thus, it is important to evaluate the amount of cover you need and choose a life insurance policy in India as per that. In case you over-insure yourself, then you might end up paying more than you need each month. Whereas, you can put that extra amount on your savings or can invest somewhere else.
You can also take help of the life insurance calculator, to evaluate the coverage amount you need.
- Choose the Right Kind of Coverage
There are various types of life insurance policies available in the market, but the type of coverage you choose will have a drastic impact on the cost of the policy. Whole life insurance policy coverage is the most costly cover to take out, as it will certainly pay out the amount at some point of time. On contrary to this, if you take term insurance then you will be covered only for the term period of the policy. The insurance companies set the premium rate of the policy by looking at the risk of paying out during the term of the policy.
For many insurance buyers, term insurance is considered as the most suitable plan to purchase in many circumstances.
- Purchase Life Insurance Online
Purchasing a life insurance plan in India is way more pocket-friendly than purchasing it offline. Insurance companies spend a huge amount of money and time in administrating and managing the sales of insurance offline. When you purchase a policy online, you help insurers to save a lot of money, which is then passed on to you as a policy discount.
Moreover, buying a policy online is not only a hassle-free process but also saves a lot of time. Through the online process, you can compare the quotes of various policies and choose the best plan as per your own requirement and suitability.
- Purchase the Life Insurance Cover When You are Young
It is a known fact that age plays the most important role in determining the premium rate of a policy. Thus, the younger you buy a life insurance policy, the cheaper the premium rate of the policy will be. For example; if you purchase a term insurance plan at the age of 30 years, the premium rate of the policy will cost approximately Rs.8,000-Rs.10,000 per month. Whereas, if you purchase the same policy at the age of 45-50 then the premium rate of the policy will cost between Rs.30,000-Rs35,000.
Thus, if you want to get the right coverage amount at an affordable premium rate then try to purchase the policy while being young.
- Think Twice Before Adding on Riders
Riders are add-on coverage offered by the insurance companies to enhance the coverage of the policy. These riders can be purchased for an extra premium and thus, it obviously increases the overall cost of the policy. Therefore, while purchasing a life insurance policy, carefully assess the need for rider prior to deciding to purchase it. Purchase the right type of insurance policy with the add-on covers only of it is necessary. Do keep in mind that you should only buy what you need.
Wrapping It up!
How much these factors affect the premium rate of the cost of the policy depends on the underwriting method and rating of each insurance companie’s. Thus, it is always suggested to compare premium quotes of different insurers while purchasing a life insurance plan. Besides this, you can always make use of these tips in order to reduce the cost of your life insurance policy.
