Great things have been spoken about the importance of having a life insurance plan. With highly affordable life insurance premiums, it’s an investment plan you can use to secure your family’s financial future.
But have you come across tips and hacks on how you could save money while shopping? Well, you possibly could have. But, I’m referring to saving while purchasing insurance.
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Believe it or not, you can save A LOT of money on your life insurance premiums – if you can read through these easy-to-follow tips that are curated just for you!
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Buying More Could Cost You Less
Everyone knows about the wholesale fundamental, which states that buying more or buying in bulk can cost you less. Think of it this way, between 1 kg of apples and 5 kg of apples, the 5 kg pack will cost you less. The simple reason for it is that the seller gets more products sold and nurtures the business. So, it’s okay to cut back on slight profit margins to get you into buying more. It’s pretty straightforward.
Life insurance or any insurance for that matter functions on almost the same principle.
If you can afford it, try to go to the next level to see how much it’s going to cost you.
For instance, if you’re looking at a life insurance plan worth $250,000, it’s advised that you see what the plan worth $300,000 is going to cost you. The chances are – there will be a marginal difference in the premiums of both the policies.
Subsequently, the sum assured increases with increase in the premium. This is a win-win situation considering that you save money on premiums and get a higher sum assured.
Shop Around Before You Make A Decision
Shopping around, testing things before buying them and analysing your decisions is a life skill. It applies to all spheres of life and not just life insurance.
When you contemplate buying insurance plans, make sure that you survey the market before you finalise your options. There is a chance that one policy might be looking attractive to you right now, but you never know. There are better policies which are best-kept secrets and unexplored.
Please don’t go for a plan which is opted by the majority; it is accessible and will try to recover its advertisement costs with a higher premium. Look for reliable insurance plans which are safe, secure and not ‘too advertised’.
Opt For Life Insurance By Your Employer
Many employers and big MNCs offer benefits to their employees to lure them into working for them. Some offer slightly less salary but make up for it with perks, health benefits, health insurance, maternity/paternity leaves, etc.
Most companies give their employees health insurance that covers their immediate family as well. Employees take this at get-go as the premiums of an insurance plan offered by the employer are relatively low. The bulk-buying fundamental is applicable here. Since the company is buying insurance plans for a lot of their employees, they get a discounted price of the plan.
And so, if you are fortunate enough to be working with an employer or a company which offers you life insurance, take it without giving it a second thought. It will cost you considerably less premium.
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Hire An Independent Insurance Agent
There are a lot of hacks, contacts, and tricks that you might not be aware of. However, an insurance agent knows all about this.
Hiring an independent insurance agent can help you save a few bucks while decreasing the stress of buying an insurance plan.
Insurance agents know the market; they will get you the best product as per your requirement at highly affordable prices. They may help you find one which enables you to save money on premiums.
Additionally, if you are someone who has underlying health and medical issues, getting life insurance on your own can become a hassle. With an insurance agent, you can leave all these worries to them and relax.
Buy Multiple, Small Policies
Many insurance companies and agents will coax you into going for a bigger life insurance plan – one which has a higher amount. They tend to not tell you is that this policy will also take a lot of time to mature.
- What if all your life goals are met before the policy matures?
- What if you had to take loans to achieve your financial goals and your insurance plan was sitting there, waiting to mature?
Hence, it is advisable to invest in several small policies over some time. They will mature at different times in life – giving you a steady payout for a good couple of years.
Look For A Temporary Life Insurance Receipt
The time taken can vary between getting a policy and finally getting it issued. The process can take a longer time if you are going to get medical tests and health check-ups done. When the insurer receives the reports, only then can your policy be issued. Even then, it can take a few weeks.
What if something happened to you between that period? Then, your policy becomes useless since it has not been issued yet and you are technically not covered.
You can prevent all that money from going to waste by asking for a temporary life insurance receipt. This will provide you with temporary coverage as soon as you send in the first premium to the insurer. This way, you will be covered by the policy even when the policy is being dispatched.
Make Annual Payments
Monthly premiums will cost you more than an annual payment of premiums. Yearly payments are better than quarterly and bi-annually payments. An annual payment of insurance premium can seem like a tremendous amount at first. But if you compare it, you will see that it costs way less than monthly premiums. Not to mention, you will free yourself of the monthly hassle of making payments.
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Inform Your Agent/Insurer about Changes/Updates
This is one of the most important things to do if you want to escape the unnecessary premiums. Make sure that you inform your insurance agent or broker about any updates. It could include a change in address due to a new house, updated mobile number.
Additionally, if you quit habits like smoking or drinking, inform your insurer about it so they can adjust your premiums accordingly. When you leave practices like these, your premiums come down drastically.
Read The Fine Print
You need to read the fine print of the policy before buying and while you’re paying premiums as well. You should know what you’re paying for. Going through your policy will tell you about the unnecessary items in the policy or the exclusion of items. This way, you can save up on premiums by looking for things you don’t want in the policy.
Look For Freebies Or Riders.
Everyone likes freebies. Whether it’s during grocery shopping or when you’re buying a life insurance plan. Hence, it would help if you look for freebies or riders in your policy. It could include anything – from a free monthly premium to adding a chronic illness rider. Most of these things won’t make a big difference to your premiums payout but will help you draw benefits while you’re still alive.
Life is already complicated as it is – life insurance premiums don’t have to be complicated too. Amidst all the hassles of life, you should not be worried about life insurance premiums. With these hacks and tips, you are sure to save up on some money on your insurance premiums. And hey! Invest that saved up money wisely!
About the guest author…
Shriya Garg
Shriya Garg is the founder of ContentNinja, who always happens to go back to her roots as a finance professional. Being good with numbers, she loves educating her team members on personal finance, investment, and other things they don’t teach at school.