Financial Updates

It is needless to mention that the primary purpose of shopping around for buying an insurance policy is to get the required coverage at an affordable cost. Purchasing life insurance is no different. It is always better to try to reduce the premium cost of your required coverage than going for a cheap life insurance policy.

You can follow these 7 tips to reduce the coverage cost of your life insurance policy.

1. Purchasing only the required coverage – Consider purchasing only the required coverage to reduce the premium cost to some extent. To do this, calculate the amount required by your family members to maintain their lifestyle in your absence. However, always reconsider coverage after 2-3 years, especially, when you have a major change in your life, such as, having a baby. 

 2. Shopping around and comparing policies – You must be knowing that shopping around and comparing policies help to choose one with the most suitable terms and conditions. This is because the insurers offer myriad policies at different premium rates. Shopping online helps to get multiple quotes at relatively less span of time.

3. Not buying ‘Guaranteed issue’ policy if healthy – It is advisable to not go for a ‘Guaranteed issue’ policy if you’re healthy. You can obtain such a policy without going for a medical exam. These policies are usually purchased by people who’ve difficulty in obtaining life insurance coverage due to certain health conditions.

4. Looking for a ‘no-load/low-load’ policy – There are relatively fewer expenses attached to a ‘no-load’ or a ‘low-load’ policy. The expenses comprise of commissions and fees of the insurance agent. To buy such a policy, you’ll have to purchase it from a financial advisor, who usually charges flat fees instead of collecting commissions from the insurers. It is definitely a better alternative than purchasing a cheap life insurance policy.

5. Purchasing rider instead of buying new policy – Don’t purchase a new life insurance policy when your needs change. Instead, buy an insurance rider and extend your life insurance coverage.

6. Paying insurance premium annually – Making annual premium payments help to reduce the policy cost to some extent as compared to paying insurance premiums quarterly or bi-annually. Insurers may also charge less if they can transfer the required payments from your bank account directly.

7. Asking for policy reevaluation – You can ask for policy reevaluation even after purchasing life insurance. Purchasing a policy with a higher premium rate doesn’t mean that you’ll have to pay high cost throughout the policy term. If you’re paying high premium due to a specific health condition, then you can ask for rate reconsideration if your health condition has improved since you purchased the policy.

Above all, improve your health condition to reduce the premium cost of a life insurance policy significantly. So, if you’ve certain pre-existing medical conditions (such as, high blood pressure or diabetes), then show your insurer evidences and reports that reveal your health condition has improved with time. This may help you to get a cheap life insurance policy that is, insurer providing you with the required coverage at an affordable premium cost.