How to Find the Cheapest Life Insurance in India: A Guide
Life insurance refers to a mutual agreement between an insurance company and a policyholder. Under this agreement, the insurer promises to pay a sum of money in return for a premium upon the policyholder's death or at the end of a specific period. However, some factors can affect the life insurance premium: age, gender, health condition, family health history, type and amount of coverage, and occupation. Read on to learn how to find the most affordable life insurance.
The Cost Benefits of Purchasing Life Insurance Early
Undoubtedly, buying life insurance is more than a necessity these days. With increasing inflation rates and medical conditions, it is suggested that you have coverage early in your life. The defined age slab by insurers is 18 to 55 or 65. So, decide accordingly as to when you wish to buy a policy.
Having the right insurance coverage at hand means you no longer have to worry about your children’s education expenses, your family’s lifestyle needs or any other expenses that might require financial support. Buying a plan at an early age is the cheapest way to get one, as the premium increases with age. Practically, the right age is somewhat 21 years, as this is when you start earning money or at least know how to earn it and have a basic understanding of financial responsibilities.
Term Insurance: A Cost-Effective Choice
There are many types of life insurance plans, including Term Insurance Plans, Endowment Insurance Plans, Money-Back Insurance Plans, Whole Life Insurance Plans, and more. Term life insurance is the most affordable option.
Term insurance plans are specifically designed to provide financial protection for your loved ones for a specific period of time and, thus, do not offer maturity benefits. However, certain types of term life insurance plans, such as a term plan with return of premiums (TROP), do provide maturity benefits. It refunds the premiums paid if the policyholder outlives the policy term.
If you're working with a tight budget, a term plan calculator can help you find the cheapest life insurance in India. This useful online tool allows you to estimate the appropriate coverage and premiums. This helps you make informed decisions with a clear understanding of your costs.
7 Things to Avoid When Buying A Life Insurance Policy
Here is the list of things that you must avoid in a life insurance policy:
- Insufficient coverage: Don't settle with a plan that doesn't cover adequate coverage amount. The policy is of no use if the coverage amount won’t fulfil your future financial needs.
- Avoid choosing long policy terms: Getting a long coverage duration should not be the sole purpose. You must understand your insurance needs and carefully decide on the policy's duration. Extending the policy term beyond your financial needs may not be the best decision.
- Unnecessary add-ons: You can add riders for extra protection or benefits, such as Accidental Death Benefits or critical illness. However, avoid unnecessary riders, as the policy premium will increase with them.
- Low claim settlement ratio: Avoid insurers with low claim settlement ratio. This ratio is a key factor in choosing a reliable insurance provider.
- Delayed Purchases: You have to bear more premium costs while buying a policy during your old age.
- Delayed premium payment: Avoid delaying premium payment to protect from extra costs and policy lapses.
- No customisation: Avoid buying a life policy that doesn't provide any customisation options, such as increasing or decreasing your coverage amount, adding riders' options, and more.
Conclusion
Life insurance comes with various benefits; some policies offer investment and savings options. The minimum age to be eligible for holding a life plan is 18, and the maximum age is 65 (age limits may vary depending on the insurer and policy type). Investing in a policy as early as possible is advisable, as premiums generally increase with age.
