Top 5 rules to reduce the Insurance Premium
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Introduction
This article talks about how to reduce the premium while people are buying 
the insurance plans. Many people not aware that the same insurance plan would cost you different expenses depends on the preference you have choose. The preference could be mode of payment, number of policies, etc. This article intend to explore few of the factors which will determine the premium of any insurance plans. Please post your doubts in the comments section. If you like the article subscribe it here.
Top 5 Rules to Reduce Insurance Premium
1. Choose the yearly mode of payment
The mode of premium payment would make the difference. Many people not aware that making the premium on Monthly, Quarterly, Half-Yearly and Yearly is not the same when you accumulate the premium paid for the whole year. The most cost effective method is to pay the premium annually. When you are planning the mode of insurance premium payment, please choose the yearly payment because it saves you money and also only once you have to make the payment. I will give you the small example how it could save you money. Look into the following table to understand the difference when you pay the premium monthly and yearly:
So, here the point is save the premium to pay yearly. Even if the amount is deposited in FD, the difference is smaller. It is one of the important factor while considering to reduce the premium amount.
2. Club the policies
If you have plan to take one or more plans, take a single plan with the same value. Buying many different plans will cost you more. If you are clubbing plans together insurance company will reduce the premium amount.
3. Buy insurance while you are healthy
Buying insurance plan while you are healthy may reduce your premium outgo. Insurance premium is largely depend on the person’s age, health and medical conditions. If the health of the insurer is not good, it is risk for insurance company if the insurer demise soon without paying the more premium. Most of the case age 35 is considered as the good condition and if some one crosses that age would under go the medical test before applying the insurance cover. So, if you are expecting any health problems in future and have plan to take the insurance cover, I would advise to take it before the age of 35 to reduce your premium.
4. Don’t pay for mark-up in premium
If you have any temporary illness or the health problem where it is not serious illness. Insurer may ask you to pay the mark-up premium above the normal premium. It is better to apply for the plan when you are healthy and not having any illness like fever,etc. Even normal fever may give the bad impression to the insurer. In that cases you can discuss with the insurance company to remove the mark-up premium, if not look for the another insurance company.
5. Attach a level term cover rider to endowment plans
There is also a level-term rider that is similar to a stand-alone term policy but can be attached to a base policy (other than a term plan) increasing the scope of cover.
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Mr. Prakash P. Joshi. said:
Always go for ‘Pure Term Insurance’ having large Sum Assured with least yearly premiums from “Aegon Religare Life Insurance Co.” which is having one of the cheapest premiums tables in this category in India.Never mix up the concept od ‘Savings & Incestment’ with Life Insurance and get entangled with flashy schemes for obvious reasons.
Be wise & smart and don’t keep blind faith on Insurance Advisors/Agents as they are Not mostly for your benefit.
Best Luck.
October 14th, 2009 at 4:52 am
