Last Updated on Apr 15, 2020 by James W
Cost is one of the biggest factors in many Indians’ decision to not to purchase life insurance. However, life insurance doesn’t have to be a major expense. With these five tips, it is possible to provide your family with peace of mind and financial security, without incurring a major financial expense.
It is true that life insurance generally becomes more expensive as you get older. But there are ways to bring the cost of your policy down and to implement a consistent savings plan that allows you to provide your loved ones with the long-term stability they need.
Get Term Insurance Over Permanent
Term insurance policies provide life insurance coverage for a fixed period. They have an expiration date at which point they are no longer valid. Should the policyholder die before this date, the beneficiary will receive the payment benefits in full.
For most people, term policies are sufficient. Dependents, like children, will eventually grow up and be able to support themselves. As a result, after a certain date, they will not need the security afforded by a permanent policy.
Term insurance policies are significantly cheaper than their permanent counterparts. Policyholders also have the freedom to choose the length of their term policy, allowing them to customize the term to suit their individual needs.
Insurance policies get more expensive the older the policyholder becomes. Buying policies earlier in life allows buyer to lock into a low rate and keep the premium payments to a minimum. Should you develop health problems later in life, you will still enjoy the low premium rate.
Don’t Buy More Coverage than is Necessary
The basic principle of life insurance is the more coverage you buy, the more it will cost you. Therefore, to keep costs to a minimum, you should only buy the coverage you need.
For example, a bachelor with no mortgage and no dependents or next of kin has no need for a policy that covers anything more than the funeral costs and any debts. But a father of four who is the sole earner with a mortgage will need to ensure his life insurance policy has sufficient coverage to keep his family financially secure in the event of his death. Examine your situation and work out exactly how much coverage you need to ensure you are not overpaying for unnecessary coverage.
Be Transparent About Your Medical History
There is a temptation to withhold minor details about your medical history in an attempt to keep your premium down, but not being open about all the facts can have an adverse impact and drive your premiums up.
If you do not disclose minor health issues when prompted in the application process and an underwriter discovers them at a later date, you may be forced to pay a higher premium or end up with a policy that is no longer the most competitive.
If You’re Healthy, Take a Medical Exam
Some life insurance policies offer the option to not take a medical exam. If you are fit and healthy, you should avoid these options. They may sound convenient at first, but you will be paying a higher premium for the luxury.
Take your time on the application, disclose all the facts, and if possible, take a medical exam to prove your health to access the lowest premiums.