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How to Save on Life Insurance Premium?

Rashmi Ghosh Rashmi Ghosh 11 April 2019

There are some hacks that will help you lower your life insurance premium. Read on to know how you can save on your premium payments.

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The wide range of life insurance policies available at affordable premium leave individuals spoiled for choice. But, wait! The good news is that you can further reduce your life insurance premium by following a few simple hacks. It requires you to do the right things, at the right time.

Let’s get started with discussing the list of criteria that determine your premium eligibility:

1. Your age: The adage, ‘The earlier, the better’ perfectly sums up how your age impacts your life insurance premium eligibility. The younger you are while buying life insurance, the lower will be the life insurance premium that you need to shell out. No wonder, every insurance advisor emphasizes that you buy a policy at the earliest. Why just your advisor? We bet you wouldn’t be able to count the infinite number of times your parents have been after you regarding a life insurance policy since the time you landed your first job!

2. Policy term and sum assured: The longer the policy term, and the higher the cover opted for, the higher will be the premium. The higher life insurance premium implies that you will be able to avail a better risk coverage, which will include the risk of the policyholder’s demise too. If you prefer to reduce your life insurance premium, this is an option that you can consider.

3. Lifestyle habits: Habits like excessive drinking and smoking have a negative impact on your health, raising a red flag for the insurer. Such unhealthy life choices increase the risk of death induced by serious illnesses like cancer, heart ailments, just to name a few. Such risks mean that you would require a comparatively higher coverage for your family’s financial security after your death caused by unhealthy lifestyle practises. Your need for a higher coverage inevitably increases your life insurance premium.

Now, how can you bring down your life insurance premium, in case you are already a heavy drinker or smoker? Buy a policy now and make sure that you regulate your unhealthy practises. Maintain it over a considerable period of time, so that the medical parameters are well within the limits specified by your life insurer. Contact your insurer to get your life insurance premium reviewed. Chances are generally good that your insurer will reduce your premium amount.

4. Your health condition: Health is wealth. And this is no exception in the domain of life insurance as well. Obesity, as defined by your life insurance company, increases your life insurance premium. This is because obesity is the root cause of diseases like diabetes, etc. that requires a higher coverage and, hence, an increased premium. There are certain other health conditions too, that may increase your life insurance premium.

5. Additional riders: Insurers offer add-on riders at an additional premium over and above the premium for their basic life insurance plan. However, sometimes individuals buy all the available riders without evaluating whether each of them are aligned to their unique insurance needs. Remember that these are optional benefits that you should purchase only if they suit your purpose, saving on the payment for riders that you will have no use of.

6. Premium payment frequency: The usual options for premium payment frequency are single payment at the time of purchase, annual, bi-annual, quarterly and monthly. Selecting the single or annual payment option will enable you to reduce your life insurance premium by saving on the administrative charges that become applicable on the other premium payment modes.

7. Buy online: Most leading life insurers offer their customers the flexibility to pay life insurance premiums through their official websites. Online plans enable policyholders to avail a lower life insurance premium because it excludes the commission charge of insurance agent.

In a nutshell

Follow the criteria discussed above and you will be able to lower your life insurance premium considerably. If not all of these criteria, even meeting at least a few of them will help you save on your premiums, and keep you sorted for life.

Recommended Read: Things must know before paying life insurance premium

Rashmi Ghosh
Written by Rashmi Ghosh
Digital enthusiast, dreamer with a colourful mind and shares her soul with canines. She survives on coffee, and food and travel feature among her topmost priorities.