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Tips to reduce life insurance premium without affecting coverage

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April 09, 2019
For covering the risks associated with life's uncertainties, insurance serves as a very basic tool. Term insurance is one of the most basic ways in which financial inclusion can be ensured for the eligible persons. A traditional life insurance policy entitles the policy holder's nominee(s) to receive the main plan benefit i.e. the sum assured in the event of policy-holder's demise during the plan term. In case the policy holder survives the term, she/he is entitled to receive the maturity benefits as well. However, a traditional term insurance plan does not offer any entitlement to the maturity benefits but simply offers the death benefit to the nominee(s) in the event of the policy holder's demise during the plan term. When it comes to choosing a term plan, the payable premium is one of the most important factors and it directly affects the terms and conditions of the coverage that is offered.

Following are the important ways in which the life insurance premium can be reduced without affecting the total coverage:

  1. Keeping occupation/activities in mind: There are certain professions that come under the category of high-risk activities. These may include professions or activities like adventure sports, fire-fighting, defense activities, chemical-industry etc., among a range of other activities. In such cases, generally the insurance providers charge heavier premiums. Therefore, due thought must be given to the activities that one pursues as this directly impacts the premiums that are payable.
  2. Habits like smoking: Notwithstanding the frequency in which you smoke, insurance providers always treat smokers as a high-risk investment. This means that the payable premiums for a smoker are always higher than those for non-smokers. These unhealthy habits have a direct impact on the payable premiums and therefore, must be avoided in order to reduce the premium.
  3. Pre-existing health conditions: At the time of purchasing the policy, when the requisite tests and medical documentation is to be done, the health conditions are to be declared. At this time, at the very outset, if there are any pre-existing health conditions, they have to be defined and documented. Most insurance providers do not offer coverage against any pre-existing conditions, especially if the condition is critical or life threatening, as this increases the risk-probability of fatality after policy purchase. However, there are certain insurance providers who do offer coverage benefits at very high premium rates. Therefore, the existence of any pre-existing health conditions leads to higher premium rates.

HDFC Life offers term insurance plans that offer diverse and extensive benefits for securing the financial strength of your family.

 

 

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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