Three Ways to Reduce Life Insurance Premiums

Insurance Premiums

A life insurance policy purchase is one of the most important investments you’ll make in your lifetime. This is not just because it is a financial cushion that will support your family in your absence but also because it includes a significant amount of investment.

Yes, life insurance policies involve a high amount of investment. Every person aims to provide an adequate amount to their family after them so that all their needs are fulfilled in his/her absence as well. For this, the insured person aims to get a higher sum assured. But higher sum assured means higher premiums.

Premiums are the money that the insured person pays at regular intervals to the insurance company. In return of which, the insurance company pays the decided sum assured to the insured person’s family if he/she passes away during the tenure. The cost of premiums plays an important role and can affect your financial cycle as well. Higher premiums mean that much amount is deducted from your income. Thus, a lot of people try to reduce the premium amount. But the major question is how?

As a smart individual, you must be invested in the right life insurance policy to safeguard your family after you. As a smart investor, you must look for ways to get more sum assured at a lesser rate of premiums.

But before we discuss how to reduce the cost of premiums, let’s have a look at what are the factors that affect the cost of the premium.

  • Age of the insured person –It is always advised to buy a life insurance policy at a younger age. This is one of the reasons behind it. When you are young, you are subject to fewer health risks, which means the risk of mortality is lesser. Thus, the cost of premiums is lower.
  • Family history of health risks – Insurance companies usually ask for your family medical history before issuing the policy. This is because the genetic factors and family history of critical illnesses such as heart diseases, diabetes, cancer, etc. are considered while deciding the premium as the risk is higher in such cases.
  • Gender – It is a proven fact that women live longer than men. Thus, the insurance premium for women is lesser than that of men applying for a life insurance policy.

How to reduce life insurance premium costs:

If you were thinking to reduce your sum assured to save the cost of premiums, then STOP! There are other ways to reduce the cost of premiums you pay towards the life insurance policy without mending the coverage. Read further to know what they are.

1. Start at an early age 

As we discussed above, the mortality risk is less when you start investing in a life insurance plan at an early age. Thus, the cost of the premium is low. The good thing is this cost of premiums does not increase with your increasing age. But if you apply for the same policy at a later stage in life, then you will have to pay a higher premium for the same coverage.

2. Buy your insurance plan online 

Online insurance purchase eliminates the cost of distributor and administration. This helps lower the cost of premiums. Thus, the insurance companies provide many discounts and offers on the online purchase of life insuranceplans. Not just that but another benefit of buying a life insurance plan online is that it enables you to compare and explore various options.

3. Maintain a healthy lifestyle

However old and cliché it may sound, but the fact is that health is your true wealth. A person who is physically active and fit doesn’t smoke, eats healthy, and takes less stress lives longer. Thus, a healthy person with low health risks is offered a low cost of premiums on life insurance.

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