Thinking You Earn Less? Here's How You Can Still Buy a Term Plan
No one can predict life’s longevity
We all know our lives are precious and are given to us as a gift. Although one cannot put a price tag to determine life’s worth, the need for financial security is highly felt in case of an unfortunate demise. It is where buying life insurance becomes crucial for everyone. It is a financial cover that relates to contingencies linked with our lives, be it death or disability.
Given the range of diseases that Indians suffer from, no one can predict life’s longevity. However, it is possible to build a financial safety net for your family with life insurance plans for the times when you will not be around. While you can find various life insurance plans in India, term plans are the ones that are easiest to understand. They are also cost-effective, meaning you can buy them no matter how much you earn. In other words, there is a term plan available for all income groups.
When it is about buying any of the life insurance plans, their cost is often the first thing that comes to mind. But it is not the only thing over which your decision of buying a term plan should be based. It is advisable not to forego the decision to buy a term plan if regular income is just enough to pay for the household expenses. Instead, look for ways with which you can lower down the premium payable for some of the best life insurance plans in India.
Here are a few tips to lower down the term plan premium while also enjoying substantial life cover:
1. Buy Early
The premium payable for life insurance plans is directly proportional to your age. The reason is quite simple – the younger you are, the lower is the risk of various diseases. On the other hand, if you wait for another five-ten years before you buy a term plan, you may find battling with a higher risk of suffering from several lifestyle diseases and critical illnesses.
Also, the insurance companies consider both your age and health condition while determining the premium payable. It means you can cut off the extra cost of buying one of the best life insurance plans at an early age. Make sure you also consider your other financial liabilities while zeroing in on a term plan that best suits your needs.
2. Choose to Pay Premium Throughout the Tenure
Choosing an appropriate tenure for life insurance plans is imperative while buying one. Depending on the tenure you select, the premium payable will vary. You may also find term insurance plans with which you can opt for a lower premium payment tenure while the policy continues till a later age.
One way to reduce the term plan premium is to opt for the regular mode to pay premium throughout the plan’s tenure. It will not cause any financial burden, and you can continue paying the premium as you earn with time.
3. Add Riders as Per Your Needs
Term insurance, being one of the most affordable life insurance plans in India, offers adequate coverage to the policyholders. However, you can extend the coverage of your term plan by selecting riders for it additionally.
Insurance companies offer a wide range of riders, like critical illness benefit, accidental cover, and waiver of premium to provide better risk protection. Although riders add significant strength to life insurance plans, you can opt for them by paying a little extra premium.
If a higher premium is a concern, make sure you only add those riders that match your lifestyle needs.
4. Opt for Higher Payment Frequency
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Most of the insurance companies offer multiple choices to pay the premium of life insurance plans, such as annual, semi-annual, quarterly, or monthly. So, if it is feasible for you to pay the premium in smaller instalments, choose a payment frequency as per your convenience. Although paying the premium in smaller instalments every month seems like the best option, you can save more by opting for the annual mode of premium payment.
A term plan is, by far, the simplest type of life insurance plans in India. Amidst the increasing risk of diseases and lower life expectancy, it is essential to buy one, irrespective of your income. Before purchasing a life cover, however, make sure you understand the various types of life insurance in India and their benefits. Also, make sure that you choose a policy with a cost-effective premium payable structure; otherwise, you might end up defaulting on the payments and forfeiting your cover.