Choosing any insurance product is an important decision, including term insurance. Buying a term insurance plan that works best is often a combination of benefits and affordability. We might try to save up a bit on the premiums, but sometimes that can hamper the policy coverage. The key is balance, as it will defeat the very purpose of having a term insurance policy.
We have a few ways that can help reduce the term insurance policy cost without compromising on its coverage. The tips mentioned below can help lower the term insurance premium rates while ensuring that the policy provides utmost financial protection to your loved ones in your absence.
- Purchase Term Insurance Early in Life.
Whether it is a term plan or any other insurance product, it is best to buy the policy at an early stage in life. Buying term insurance policy when you are healthy and preferably young is one way to secure an affordable premium rate. The reason behind this is, as you grow older, your risks of acquiring life-threatening diseases increases. Because of this, the mortality risk increases manifold, which, in turn, leads to a higher term insurance premium. Thus, it is highly recommended to buy term insurance as early as possible.
- Maintain a Healthy Lifestyle.
Leading a healthy lifestyle decreases your risk of falling sick or suffering from a life-threatening disease. A healthy individual is more likely to secure an affordable premium rate as compared to someone who has health complications. Besides, lifestyle habits such as smoking and drinking can also affect the term insurance premium rate. So, if you are looking to save money on premiums, make necessary changes to your lifestyle and improve your health.
- Opt for a Longer Tenure.
Whenever you buy a term insurance policy, choose the highest possible policy duration, especially if you wish to secure a lower premium rate. Usually, insurers provide a term between 40 years and 50 years with varied term insurance benefits.
- Select the Right Sum Assured.
Knowing the right sum assured amount that will help you secure your family’s financial future can be confusing. However, if you follow a simple thumb rule, your ideal term insurance coverage should be 10-15 times your current annual income. You have to understand that the higher the sum assured is, the higher your term insurance premiums will be. So, decide wisely!
- Always Compare Different Term Plans.
Different insurers in India provide several term insurance variants. Choosing the right term insurance plan among the several policies available in the market can get overwhelming. But don’t be hasty when deciding. A simple way around this is to compare the different term insurance plans based on their coverage, rider benefits, affordability, etc. You can use the term insurance calculatorto determine the policy cost as per your desired coverage and rider benefits. These insights will encourage you to choose the right term insurance plan.
So, these are some ways in which you can save on your term insurance premiums without having to compromise on the benefits it offers. After all, financial security for your loved ones is everything!