One of the most crucial aspects of financial planning is to invest in a well-rounded life insurance plan. Financial experts recommend young investors to start getting life insurance quotes as soon as they start earning so that they can buy a policy at the right time and save money in the process.
If you are buying life insurance for the first time, you may have often wondered how to reduce insurance premium. The quickest and the easiest way is to start investing early. If you are in your late 20s or early 30s, the insurance provider considers you as a low risk and offers you the lowest premium rates. But as you grow older, your premium will also increase.
Needless to say, it is necessary for you to take a life insurance policy at some point to protect your families against life’s uncertainties, so why not do it now? But before you dive into life insurance quotes, let us understand this financial instrument and how it helps you secure your loved ones.
What is life insurance?
A life insurance policy is a contract between you and the insurer that they will pay the predetermined sum assured to the insured person’s beneficiary after their untimely demise. You can avail this protection by paying regular premiums to the insurer to keep the policy active.
The death benefit is usually paid to the insured person’s family member. In some policies, you may also be able to avail survival benefit to the policyholder who outlives the term.
There are many life insurance plans that come with various features and benefits, giving you plenty of options to choose from.
The process of choosing the best plan usually involves going through life insurance quotes offered by multiple insurance providers.
Life insurance quotes give you a reasonable idea about the cost, also known as premium, of the policy and the benefits you are buying from that money. Premiums help you compare the policies and help you choose the right one. But most importantly, it tells you how much it is going to cost to you.
Tips to get life insurance quotes
There are two ways in which you can get life insurance quotes:
- Offline
This is a traditional method in which you need to approach a trusted insurance agent associated with an insurance provider to help you choose the best policy. They will manually assess your needs and calculate premium to make insurance policy recommendations. You can discuss the life insurance quote with the advisor and make your decision based on their calculations and suggestions. This can be a helpful method if you are a first-time investor.
- Online
Another method of getting life insurance quotes is doing it online. You can browse aggregator sites and find quotes from multiple insurance providers and compare them easily online. This is a simple process of obtaining quotes that is also quick and easy. All you need to do is enter basic details, such as name, age, income, dependents, lifestyle habits, etc. to get a list of plans that suit your requirements. You can compare these quotes online and decide which ones work best for you. You can also shop around for quotes by checking out multiple sites for a better idea.
Factors influencing cost of life insurance cover
Here are some factors that will influence the price of your insurance cover and help you compare plans objectively:
- Sum assured
As a general rule, you must always opt for a cover at least 15-20 times your current annual income. This will give you a baseline figure upon which you can build your exact sum assured. Be sure to take your dependents into account along with your lifestyle preferences, current income, and the time period for which they will require minimum financial support.
- Policy duration
The tenure of your plan will depend on two main things – the duration for which your family requires protection after you are gone and your working years. It is advised to remain invested for all your working years to ensure optimum financial security. You can also use a life insurance calculator to determine the right tenure.
- Age and gender
Age can have a huge impact on your life insurance quotes. It is always better to buy a life insurance plan as early as possible as your premiums will increase with age. You will be able to get higher coverage at a lower price than someone who is older. Some insurance providers also offer better rates to women.
- Pre-existing illness
If you have a pre-existing illness or a family history of serious illnesses, then your premium rates will be higher. The same holds true for habitual smokers and drinkers.
- Job/occupation
A person involved in a high-risk or hazardous profession will have to pay a higher premium.
Knowing these basic things about life insurance quotes will help you choose the best and the most affordable policy at the right time.
