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How To Reduce Your Life Insurance Premium?

How To Reduce Your Life Insurance Premium?

reduce life insurance premium

Life insurance is a critical part of financial planning. Yet, quite a large number of people forgo this peace of mind because they harbour reservations about its cost. However, there are a number of handy tips you can make use of to lower your life insurance premium.

That said, a cheap policy may not be the best insurance plan to bank upon. However, there are ways to keep the insurance premium to a minimum without compromising on the best life insurance policy you need. By putting certain tips and tricks into practice, you can ensure you avail the maximum amount of coverage at nominal costs.

Insurance premiums are set after considering a number of factors, including age, health, habits and lifestyle. Some of these factors are within your control while others are beyond your influence, but they decide whether your insurance premiums will be expensive or within your budget.

5 Ways To Reduce Your Life Insurance Premium

Start Early: The tendency among the youth is to live life to its fullest without thinking much about the future because it’s such a phase of life when you want to innovate, experiment and discover. However, when it comes to life insurance, the earlier you start, the better it is. It helps you reduce life insurance premiums, besides offering multiple other benefits. Your premium amount will be based on factors like how soon or likely the insurer thinks you are to claim and your health conditions. The older you are, the higher the chances that you’ll suffer from health issues in the near future. If you buy the best life insurance policy at an early age, you'll qualify for cheaper premium amounts than you might when you're older.

Don’t Over-Insure: There is no denying that we all need life insurance coverage to protect the future. But does it mean the higher the coverage, the better off you are? No, that is a common misconception. Some people don’t buy sufficient amount of cover to reduce life insurance premium, and that’s the biggest mistake one can make. On the other hand, there are people who get over-excessively insured. Over-insurance is a situation wherein you buy more coverage than you actually need. If you’re over-insured, you end up paying more than you need each month, and lose the cash you could spend putting into practice a healthy lifestyle. So, it’s always better to do proper math before you opt for a life insurance policy. Life insurance isn’t only about coverage and investments for the future; it’s also about utilizing the plan to your advantage without burning a hole in your pocket. The key here is to get the right amount of coverage.

Stop Excessive Drinking, Smoking: Most insurers ask about your health status while issuing a life insurance plan and some insist that you must get a health checkup done to obtain a policy. All of this is because your health is a major factor in determining your mortality risk. Adopting healthier habits will keep you healthy and safe, and most importantly cut the risk you'll need to claim. When your insurer gets to know that you maintain a healthy lifestyle and have no health-related issues, it will reduce your life insurance premium.

Excessive smoking and drinking habits put you at a higher risk of health hazards. Avoid picking up such unhealthy habits; if you’ve already picked up these habits, quit as soon as possible because they negatively impact your health and increase your mortality risk. Therefore, if you’re a smoker, the insurer will ask you to pay more premium than a non-smoker. Similarly, the insurer will charge you more if you drink too much.

Compare Policies: Each insurance company has its own terms and conditions, and methods of assessing risk and liabilities of offering a particular plan to a particular individual. This may result in different premiums for the same cover for every individual, depending upon his or her hobbies, profession, health conditions etc. Therefore, it’s highly advisable that you compare insurance plans before purchasing one. This can be time-consuming but allows you to choose the best plan according to your present and future needs. To reduce your life insurance premium, you can also purchase a suitable policy online. Purchasing a policy online is the cheapest way to buy insurance, since there is no intermediary involved in the process. It not only saves you money, but also time.

You can also reduce your life insurance premiums by avoiding hobbies and occupations that are full of risk, cutting down one or two riders, getting rid of obesity or opting for a lesser tenure.

Canara HSBC Oriental Bank of Commerce offers you an optimum amount of coverage at affordable premiums. With its iSelect Star Term Plan, you can choose from a wide variety of options to customize your coverage. You also get heaps of additional benefits, ranging from spousal cover to maturity benefits. Secure your family’s future by purchasing enhanced coverage at nominal rates.

Speak to an insurance specialist now!

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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