Tips to reduce your Term Insurance Plan Premium

Tips to reduce your Term Insurance Plan Premium A term life insurance policy is the most rudimentary form of life insurance cover which promises financial assistance in case of premature death. If the bread-winner of a family dies prematurely, the family incurs a substantial financial loss as their source of income is lost. In such cases, if a term life insurance plan is in force, the policy pays a considerable death benefit to the bereaved family which provides them financial assistance to meet their expenses.

Term insurance ​policies usually cover only the death risk of the insured. As such, term insurance premiums are very low. In fact, term insurance plans are the cheapest life insurance plans available in the market. Moreover, there are ways in which you can even reduce your term insurance premium. Do you know how?

Here are some suggestions – 1. Buy young Term insurance premiums depend on your age. The older you are the higher would be the premium charged. So, if you want to have lower premium rates, buy a policy at younger ages. You would not only get coverage from an earlier age, but the premiums would also be quite low.

2. Live healthily If you have medical ailments when you are buying a term life insurance plan the risk of premature death increases. An unhealthy life carries a higher mortality risk than a healthy one. To account for the increased mortality risk, insurance companies increase the term insurance premium. So, try and live a healthy life so that your premiums are reduced.

3. Avoid smoking Tobacco has a very high impact on term insurance premiums. If you smoke, the premiums of your term life insurance policy would be increased to compensate for the smoking risk which increases mortality.

So, avoid smoking if you want lower premiums.

4. Choose a long coverage tenure When you buy a term life insurance policy, ideally, you should choose the maximum possible coverage duration. This would give you two main benefits. One, you would be covered for a longer period. Two, the annual premium payable would be quite low. So, to reduce your annual premium outgo, opt for long term coverage duration.

5. Be wise in premium payments When opting for the premium payment mode of your term life insurance policy choose the regular premium payment mode and pay premiums throughout the policy duration. Though term insurance plans allow limited premium payments too, the annual premiums under such options are higher

compared to regular premiums. Moreover, pay the premium annually or half-yearly. Monthly and quarterly premiums incur additional administrative costs for the insurance company. As such, companies impose an additional loading such premiums. So, if you pay annual or half-yearly premiums, you can avoid the loadings and reduce the premium. Furthermore, you can also enjoy premium discounts which some companies allow for annual and/or half-yearly mode of premium payments helping you to reduce your term insurance premium further.

6. Compare the available plans Term life insurance policies are popular because of the coverage that they provide. As such, all life insurance companies offer term insurance coverage for their customers. The premium rates of different term insurance plans are different and you can find the lowest premium policy when you compare.

Comparing term insurance plans, therefore, not only allows you to buy the best insurance policy, it also ensures that the term insurance premium that you pay is the lowest.

7. Look for discounts Term plans offer a range of premium discounts. For instance, discounts are offered for paying premiums annually or half-yearly, for non-smokers, for female lives, for choosing higher coverage levels, etc. Look for these discounts and avail as many as you can for reducing your premium by the maximum possible amount.

8. Buy online Term life insurance plans are also offered online, directly by insurance companies to interested customers. This online mode eliminates the need for middle-men and, consequently, the commission payable to them. As the commission element is removed, premiums are reduced.

These are some of the best and the easiest ways to reduce your term insurance premiums. How many of these would you use when buying a term life insurance policy for yourself?