5 Smart Ways to Save On Your Term Life Insurance Premiums
One of the best-selling life insurance products currently in the Indian market, Term Life Insurance can be easily considered to be “Evergreen”, and rightly so; they are affordable, practical options at every stage of your life. If you have not invested in a term plan yet, it is highly recommended that you do so immediately, as buying a term insurance plan early can be hugely beneficial, as we’ll see.
But what are Term Plans?
They are life insurance products at their most basic. Here, you get a life cover for a sum assured in exchange for the premiums that you pay. The life cover is valid for a certain period of time or term. It is also known as the policy term. The premiums are very low, and the sum assured is generally very large, and that is what makes these policies so attractive to the customers.
Individuals prefer term plans to secure the financial futures of their families and loved ones.
Few Benefits of Term Plan:
- Affordable – The first and foremost thing about term plans is that they are very reasonable. The low premiums make them a suitable option for most people, especially those who are just commencing their financial journey. The low premiums can be paid annually, half-yearly, quarterly, or monthly.
- Tax Savings – Another benefit is the tax exemption that you get on the premiums you pay. Section 80C, Income Tax Act, 1961 states that premiums paid up to an amount of INR 1.5 lacs are exempted from taxation. Moreover, the sum assured is also tax-free under section 10(10D) of the act.
- Life Cover – The large life cover that you can avail under a term plan is an ideal option for providing financial security to your dependents, especially if you happen to be the primary breadwinner of the family. It promises that your family will be well protected in your absence.
- Riders – Most companies offer practical riders, or add-ons, to make the policy more comprehensive for you. These include critical illness riders, accident riders, and a return of premium riders. These add-ons increase the premium amount by a bit but bring a lot of value as well.
So, getting a term plan for yourself is a no-brainer. You can check out the term plans offered by Edelweiss Tokio Life Insurance by visiting their website and learning more about their benefits and features. They also have a free tool through which you can get an estimate of your premiums for the sum assured and policy tenure that you are seeking.
Before you go ahead with it, there are some tips that you can follow to make sure that you get the lowest premiums possible.
- Start Early: Your premiums depend on multiple factors, like your preferred sum assured, the policy tenure, and your health. But the factor that is the most crucial is your age. Term plans are at their most affordable when purchased early.
- Renew on Time: Policy Renewal on time can make sure you avoid any unnecessary charges and keep the overall cost in check.
- Choose the Right Policy: This is from a personal financial point of view. You should go for a policy that is right for you and avoid any unnecessary add-ons to keep the premiums in check.
- Choose Annual Payment Option: If it is possible, choose to pay the premiums annually. Annual payments are generally lower than other payment modes of shorter periods. You can put aside a small monthly amount and then pay in one go annually.
- Go For an Online Term Plan: By getting your term life insurance online, you can save on commissions and, in some cases, lock lower premiums as well. The process is simple, and you can learn more about it on the website of Edelweiss Tokio Life Insurance.
Things to Keep in Mind While Buying a Term Plan
While choosing a policy, there are three critical things for you to remember:
- Right Term: Term plans usually have no maturity benefits. In some cases, you may get your premiums back if you have chosen the corresponding rider, but that’s about it. So choose the policy term carefully. It should ideally be up to the age till which you can see yourself working.
- Right Cover: The sum assured should be enough to cover all major expenses and liabilities for your family. So keep inflation in mind while deciding on a life cover. Ideally, the sum assured should be somewhere between 15 to 20 times your current annual salary.
- Claim Settlement Ratio: Claim settlement ratio (CSR) is an indicator of how many claims per hundred have been settled by the insurance company in the last fiscal year. You can gauge the likelihood of a successful claim settlement in your absence by looking at the CSR of the company.
Term Plans are highly recommended for young professionals as well as those who are looking for an affordable life insurance policy that can provide adequate support to their families in their absence.
Check out Edelweiss Tokio Life Insurance’s Zindagi+, a comprehensive term plan with some practical rider options, especially if you have a spouse. Visit their website today to learn more!