How To Save On Premiums
September 30, 2018
A life insurance premium is the amount of money that a policyholder pays periodically for an insurance policy. So life insurance premiums can be paid monthly, quarterly and yearly. Here is how to save on premiums.
How life insurance premiums are calculated – Save on Premiums
Life insurance companies employ highly trained and qualified personnel to determine the premium that a policyholder pays. The several factors considered when calculating premiums for policyholders include:
- Geographic location
Insurance, in general, is a game of risks. The higher a policyholder seems to be at risk of dying early, the higher the premium amount he/she has to pay.
Minimising premiums – Save on Premiums
A policyholder can save on premiums by convincing life insurance companies that he/she is at a lower risk of dying early. A policyholder can save on premiums by:
- Quitting smoking
Smoking is a sure way of failing a life insurance risk test and pay more on premiums. Tobacco is a financial burden for the life insurance industry.
- Losing weight
Having an overweight body causes people to pay more premiums. It is because obesity is associated with several severe diseases including heart attacks and high blood pressure.
- Maintaining a clean driving record
A clean driving record reduces a policyholder’s risk of being involved in an accident and as a result, die. Policyholders with a clean driving record pay fewer premiums compared to those without a clean record.
- Staying healthy
A healthy person is to be less likely to die and therefore pay fewer premiums.
- Living a risk-free life
A policyholder can pay fewer premiums if he/she lives a less dangerous lifestyle. So for example, policyholders who participate in extreme and dangerous sports are more likely to pay higher premiums because they have a higher risk of dying early.
- Buying life insurance early rather than later
The older a person is, the more he is likely to die. If a policyholder buys his/her life insurance at a younger age, he/she will pay less compared to the value the person will pay if he/she bought the life insurance at an old age.
- Opting for a less benefit pay-out
A policyholder that requires a larger benefit pay-out will most likely pay higher premiums. So a policyholder can reduce premiums by lowering the desired amount of death benefit.
- Knowing the hidden fees
A policyholder must avoid paying premiums on a regular basis. It is cheaper to pay premiums on an annual or quarterly basis than to pay monthly. There is a fee for paying premiums.
- Choosing term life policy over whole life policy
A term life policy is more affordable than a whole life policy because a whole life policy does not expire. A term life policy exists for a set period.
- Doing business with a reputable company
Buying a Policy
Purchasing a life policy from a reputable and financially sound company may save a policyholder some money on the premiums paid.
So premiums don’t have to be a financial burden for policyholders. Also, policyholders should find a way to minimise their premiums and have a healthy financial life with great benefits.
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All info was correct at time of publishing