Things You Must Do to Minimise Your Term Plan Premium

We all know that life is full of uncertainties, and it often hits you the hardest when you least expect it. Hence, it is paramount that you think of possible solutions to help you deal with such situations that are beyond your control. One such effective solution is term insurance. It enables you to live a stress-free life as it removes the potential financial distress your family may face in the event of your unfortunate and untimely demise.

As the name suggests, a term insurance offers financial protection to your family against future uncertainties for a specific period. It provides them monetary compensation in the form of death benefits if you pass away during the policy period. Thus, it ensures that your family never faces a financial crunch or compromises on their lifestyle.

Compared to other life insurance policies like ULIP or whole life insurance, term plans have an affordable premium. However, there are specific ways to minimise the premium and get maximum coverage.

  • Purchase the policy early

Buying a term insurance plan early is the key to minimising the premium, as the rates are directly linked to your age. The younger you are, the lower the premium. When you are young, you may be in the best shape physically and the lesser chances of mortality due to health issues.

So, to get the term life insurance coverage at the lowest price, it is better to purchase the policy in your early 20s or as soon as you draw your first salary. Once the insurer fixes the premium at the buy of buying the policy, it remains unchanged throughout the policy tenure.

  • Maintain a healthy lifestyle

If you have the habit of smoking or drinking or have any other addiction to narcotic substances, be ready to pay a higher premium on your term plan. This is because insurance companies know that such habits significantly impact your health and increase the chances of death. So, maintain a healthy lifestyle to get term life insurance coverage at a lower premium.

  • Compare the policies

Another effective way to minimise your term insurance premium is to be proactive and compare the different plans online before making your final purchase decision. When you can compare the policies, look at the coverage offered and the premium charged, and choose the right policy that is affordable and, more importantly, caters to your specific needs.

  • Choose an annual premium payment mode

Most insurance companies in India allow you to choose the premium payment mode as per your need. You can opt for monthly, quarterly, or annual premium payment options.

Many people choose monthly premium payments as they find it more feasible to pay a smaller amount regularly than making a big payment in one go. However, the truth is the premium tends to work out much cheaper if you choose the annual premium payment mode.

  • Don’t include unnecessary add-ons/riders

When you buy a term insurance policy, the insurer may insist you purchase a rider or add-on and get additional protection against specific risks that are not covered under the standard policy. However, you must know that buying an insurance plan rider means paying an additional premium, and the more riders you buy, the higher the cost. It is advisable to assess your needs and buy only the required add-ons to keep the premium costs low.

Final Word

Buying a term insurance policy is no child’s play. It requires proper planning and research. Now that you know how to get coverage at a lower premium, use these tips to good effect and minimise your premium.

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