Estimating Life Insurance Premium? You Need to Know This

Estimating Life Insurance Premium? You Need to Know This

Life insurance policy purchase happens to be an essential and unavoidable decision that every individual thinks about at some point in their lives. However, like all other insurance products that many of us buy, we would always like to pay as little as possible. Many people look for ways to reduce your monthly expenses and take control of their finances to get a life cover that fits into their budget.

By making use of a life insurance calculator, you can estimate your premium and figure out exactly how much you have to pay, based on the term you decide. Calculating your life insurance premium is very crucial before you go ahead and buy life insurance.

How To Lower Your Life Insurance Premium?

From various types of life insurance plans out there, like term plan, endowment plan, and retirement plan, you can select the one that offers maximum benefit to you. Once you narrow down on the type of life insurance you want, it becomes easier to figure out the rest of details.

  1. Consider the life insurance sum assured you need

    It is crucial to take a quick look at your current financial plan and then determine precisely how much sum assured would you need from your life insurance plan. Before you buy life insurance, remember that if you end up buying too large a cover, it will significantly increase the premium.

  2. Figure out about tax benefits

    Once you have narrowed down on the sum assured that you’re looking for, you need to round up all the tax benefits that you can avail of under your plan. For example, there are a couple of sections under the Income Tax Act, which will allow you to save tax against the premium you’re paying for your life insurance policy.

  3. Select the right premium payment term

    While the regular payment plan is always an option, a few other options can offer you better benefits. If you choose the limited premium payment mode, you can choose to make payments for a shorter period and enjoy your insurance benefits for an extended period. Although your premium amount will go up compared to the regular payment plan, but if you can handle it, it’s worth a shot.

    You could also opt for the single payment option, which means that you pay your entire premium in one go and don’t have to worry about paying it for the rest of the tenure. Inflation may change the value of premium payment over the years. There is a monumental difference when one pays yearly premiums for 20 to 30 years and making a one-time premium payment.

  4. Select limited riders

    Many times, applicants find it confusing to choose from various additional riders that life insurance policies offer. It is advisable to research thoroughly and ask an insurance advisor to help you pick only those riders that will benefit you the most.

  5. Look out for hidden fees

    There is a possibility of hidden fees based on the kind of company and the insurance policy you choose. While you are figuring out which life insurance plan suits you best, make sure to check for hidden fees. For example, some insurers charge their policyholders extra fees when they opt for a monthly premium payment plan instead of yearly.

  6. Compare life insurance policy from different insurers

    Estimating Life Insurance Premium? You Need to Know This

    As with any product you purchase, comparing quotes is always a wise path to follow. When it is about life insurance, you can figure out the kind of life insurance cover you’re looking for and get quotes from different insurance companies for the same. From the rate of interest to additional riders and premium options, everything must be compared before you finalise the plan and the insurer.

  7. Improve lifestyle and get healthier

    This is not a very common way to save premium, but it is worth a shot. Staying fitter, practicing a healthy lifestyle, and abandoning lousy lifestyle habits can also get you a lesser premium or lower rate of interest. A middle-aged person who suffers from a critical or lifestyle illness will end up paying a higher premium as opposed to someone from the same age group, which is healthier and fitter. Avoiding smoking and keeping a check on your lifestyle choices can go a long way as well.

    Eventually, life insurance plans are crucial for every individual who wants to cover their life and protect their family in the process. It is all the more critical that you do enough research on these plans and find a policy for the premium that suits you best.