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8 Ways to Reduce Life Insurance Premiums

8 Ways to Reduce Life Insurance Premiums

Life insurance is certainly one of the best ways to take care of your family' s future in case of any eventuality. In fact, it is considered as the most important investment as it works towards the safety of the insured person's family members after his/her demise. Through a life insurance cover, the insurance company ensures your family's financial security is maintained even when the breadwinner is not around. It acts as cover that saves your family from being deprived of the material necessities that they may require in your absence.

As this investment involves your family, you need to be smart enough to choose the right policy. But as a smart investor, you should also look for a combination of factors to save on your premium cost. To help you understand better, here are the following points that you need to keep in mind while buying a life insurance policy -

  • Buy insurance at a young age - It is advisable for a person to start investing in an insurance policy as he/she starts earning. As younger the age, lower the premium. Because the premium of your insurance policy increases with age. Thus, prefer buying an insurance at a young age if you want to avoid paying higher premium.
  • Choose the ideal policy term - The tenure of your policy plays a major role in determining the amount of premium. Thus, one must consider the policy term while buying a life insurance policy. The longer is the term of your policy, the lower will be your premium. For instance, if you are a salaried person, then it is advisable to take the coverage till the age of 50-60 years so that you can meet through all liabilities easily.
  • Follow a healthy lifestyle - A healthier person will get to pay lesser premium. As insurance companies nowadays are giving too much attention to the medical history of the policyholder. If a person is suffering from high blood pressure or heart disease, then he/she is more likely to die earlier than the person without such health problems. Lifestyle ailments like blood pressure and hypertension can increase the amount of your premium. Thus, it's good to maintain a healthy lifestyle.
  • Facts

    Avoid smoking/drinking habits - Both of these habits have a negative impact on your health. Health plays a very important role in deciding the premium of your insurance policy. So, if you smoke regularly, then you're at a higher risk of getting health-related problems and you have to pay a higher premium than others as higher risk means higher premium. An insurance company considers these factors too while determining your premium amount. Therefore, to lower down the amount of premium, you must avoid the habit of smoking.

  • Compare policies before buying a plan - This is yet another important thing that you need to consider while buying a life insurance plan. Never take any decision of buying a plan on the basis of ads or recommendation from your relatives or closed ones as everyone has different needs and wants. After comparing other plans, you can choose the one that offers adequate coverage at an affordable price.
  • Pay your premiums on time - It is advisable to pay your premiums on time. In case an insured person does not pay his/her premiums on time, then a late premium fee will be charged which will increase the amount of your premium.
  • Do not include add-ons that you don't need - Many insurance companies offer additional cover at additional charges. Remember, extra protection comes at extra cost. Thus, you must evaluate your needs and opt only those riders that you actually require. As this will help you lower down the amount of your premium.
  • Buy policy online - As compared to offline plans, premium charged for an online plan is comparatively less. This is because there's no additional cost as you are directly buying from the insurance company, not from the agents and other intermediaries.

On the whole, the correct information and right research will help you find the best policy which can save thousands on your premium. Thus, you must consider these above-mentioned factors to reduce your life insurance premium.

Besides, if you are looking for an adequate life insurance plan online, then go for Canara HSBC OBC Life Insurance. We offer several different types of life insurance policies, including Invest 4G ULIP plan that offers risk cover along with additional investment options as per your needs.

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Frequently Asked Questions (FAQs) Related to Life Insurance Policies

The premium is one of the most important factors to consider before buying a life insurance policy. Many people buy a life insurance policy with a high sum assured but are unable to process the premiums for the entire premium payment tenure. You can get a better idea of the premium outgo with the premium calculator available in the 'Tools and Calculator' section of www.canarahsbclife.com.

Life insurance plans come with several riders which increase the efficiency of the policy for the buyer. For instance, if you have a history of terminal illness in your family it would be advisable to opt for terminal illness rider with your term insurance plan. Riders or add-ons help in customising the standard policy benefits for the requirement of different families. The iSelect term insurance plan comes with a built-in cover for terminal illness, and option for protection against accidental death or disability. You can also opt to cover your spouse's life under the same policy by paying an additional premium.

Life insurance companies calculate the premiums based on several factors such as age, gender and occupation.

Age: It is one of the biggest factors that influence life insurance premiums. Premiums tend to be low when the life insured is younger as the chance of contracting diseases is low. Young people also opt for the best life insurance policies with longer tenures and pay premiums for a longer duration, which makes the policy cheaper for young people.

Gender: The insurance premium for women is generally lower when it comes to life insurance plans. Women live longer and pose a lesser risk of a claim leading to lower premiums for them.

Lifestyle habits: The premiums for people who smoke or drink is always higher due to higher health risks.

Policy term: Policy terms are also taken into consideration by insurers while deciding the premium amount. Life insurance policies with longer tenure are cheaper as compared to short-duration policies.

Mode of purchase: The platform that you use to buy the best life insurance policy also determines how much you will have to pay for the plan. People who buy life insurance policies online have to pay lower premiums as compared to offline policies.

Occupation: The nature of your work is an important factor that influences the premium amount. Certain occupations like shipping and mining are considered more dangerous as compared to jobs in services industries. The insurance premium rises with the risk profile.

Processing life insurance claim is a transparent and smooth process with Canara HSBC Oriental Bank of Commerce Life Insurance.

In case of the death of the life insured, the nominee will have to intimate the company by filling a Death Claim Form and sending it to the nearest branch office.

Once the form is received, the claim is registered by the insurer.

After the registration of the claim, the company will send the claims pack along with the related forms such as physician’s statement form and employer certificate that need to be filled.

Along with the duly filled forms a few documents such as original [policy document, death certificate, copy of bank passbook, hospital or treatment records, photo identification and address proof have to be provided.

The claim is processed on the submission of relevant documents. Once the documents are verified, the claim amount is released post all due diligence.

Household expenses rise with age. The cost of children's education increases along with other lifestyle expenses. The iSelect term plan offers an option to increase the cover according to the life stage. If opted, the insurance cover increases by 25% at every 5-year terminal till the 20th policy year.

Even though a life insurance policy is bought to protect your family in your absence, there are chances of the claim being rejected due to several factors.

False information: If the policyholder provides false information or conceals important information while buying the life insurance policy, the insurer has the right to reject the claim after his/her death.

Type of death: Deaths due to suicide in first policy year, intoxication or pre-existing disease is not covered under life insurance plan.

Premium payment: The payment of premiums on time is of utmost important to avail the benefits of life insurance. Life insurance policy may lapse on the failure to pay the premiums

Nominee details: A life insurance company can put the claim on hold if the nominee details have not been filled or not been updated by the policyholder.

Suicide: If the life insured commits suicide within 12 months of buying the life insurance policy, the insurance companies generally pay 80% of the total premiums paid.

Buying the best life insurance plan online is not only safe but a better option. Online life insurance policies have lower premiums and the individual is not required to visit the insurer's branch or a bank. The best life insurance policies online insurance offer higher benefits. Customers should, however, buy online life insurance policies only from credible insurers and should check for SSL certificate on the website to ensure that the website is legitimate.

The cost of life insurance policies varies depending on factors like age, gender and occupation. The average cost of life insurance plans, especially term plans, is very low compared to the amount of coverage offered.

An individual is allowed to have multiple life insurance policies. People opt for more than one life insurance policy to increase the cover or avoid claim rejection. In case of multiple life insurance policies, even if the claim is rejected by one insurer, the beneficiaries may receive the benefit from a different insurer.

Life insurance policies are of different types. In case of unit-linked or endowment policies the policyholder receives the maturity benefit at the end of the policy term. However, in the case of term insurance plans, there are no maturity benefits. The death benefit is only paid out after the death of the life insured.

When you buy a life insurance policy, the insurance company asks for the nominee details. Only the person named as the nominee in the life insurance plan can cash out in case of death of life insured.

A life insurance policy is generally taken for a specified period. After the policy duration of a term plan gets over, the policy simply terminates and ceases to exist. However, in case of unit-linked plans or endowment, you can use the policy as a tool for retirement planning and the accumulated corpus is used by the insurer to pay you monthly amounts for your entire life.

If a policyholder purchases a term plan for 25 years and dies during the policy term, the beneficiary receives the death benefit. In case of iSelect term plan, the policy provides four payment options to the beneficiaries. If the regular payment option is chosen, the policy works as a source of regular income.

It is a popular misconception that life insurance plans are only for accidental deaths. A term life insurance plan like iSelect Star Term Plan also covers terminal disease along with death. A terminal illness cover is important as health insurance pays only for the cost of treatment and hospitalization, but a terminal illness cover pays you a lump-sum amount which takes care of other expenses. On the other hand, unit-linked policies such as Invest 4G cover death and also provide decent returns for other financial goals such as buying a house of child's education.

It is ideal to buy a life insurance plan in your early 20s because it is the time when people have just started with their professional life and so there are lesser responsibilities and financial liabilities to take care of. Also, if you buy the best life insurance plan at this age, you will be paying relatively lower insurance premiums since it’s a due fact that mortality rate in case of young people is low. And that is why life insurance companies offer lesser premium rates to younger people as they think that they are most likely to be fit and healthier with less chances of filing a claim in future.

Once you have cancelled your life insurance policy, you will instantly lose your life insurance cover. Afterwards, your insurance company will get in touch with you and ask for valid reasons regarding the cancellation of your policy. In case you cancel your life insurance policy within the grace period, i.e. 15 to 30 days, depending on your insurer, then insurance company will reimburse the premium amount paid by you. But, no refunds will be paid to you if the policy is cancelled after the grace period.

Yes, you can take life insurance under Married Women’s Property (MWP) Act, 1984 only if you are a married man and a resident of India. Buying a life insurance plan under MWP Act would be helpful in saving your family’s financial well-being when you are not around. As per this policy, only wife and children would be eligible to receive the death benefits. You can also buy a policy if you are a widower or a divorcee. However, in that case, you can give your child’s name as your beneficiary. It is very simple to buy a life plan under MWP Act. All you need to do is to fill up an MWP addendum while purchasing an insurance policy.

Yes, there are different payment options for you to pay premiums. Here’re some of them

    1. Regular premium payment option – This premium payment option allows you to pay premiums equal to your policy term either monthly, quarterly, half yearly or annually.

    2. Single payment option – Through this premium payment option, you can pay the lump-sum amount in one single payment.

    3. Limited payment option -In this premium payment option, you can pay premiums for a specific period of time less than policy term either monthly, quarterly, half yearly or annually, but benefits of insurance can be enjoyed for a longer period of time.

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