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You may have heard people telling you that life insurance is a must and that you shouldn’t delay in getting it for your family. You may have also heard about all the benefits of buying a term insurance plan. But has anybody ever told you about any helpful insurance hacks to get the best deal? Or are you still confused when looking at online term plans?
There are some specific life insurance hacks that can make the process of getting a comprehensive term insurance policy smooth-sailing for you. The following five insurance hacks will equip you with the knowledge and confidence you need to make the best decision for yourself and your family.
1. Buying more for less
You can wonder, ‘What are some of the ways to keep costs down for life insurance?’ The answer may seem counterintuitive. Logic may lead you to believe that a term insurance policy with a higher sum assured or a longer term period will have a higher premium. However, that may not always be true. Just like when you buy anything in bulk, such as groceries, the overall amount you pay decreases. For term insurance too, this rule applies.
For instance, you may opt for a term insurance plan for 35 years believing that the annual premium of the policy will shoot up if you opt for a term of 45 years. But depending on the insurance company, the premium will either remain the same or even get reduced. This works for the sum assured too. This typically happens once you cross a certain threshold of the sum assured. Hence, you should explore all your options and be open to looking at term insurance plans with a higher sum assured and term period. You may just get a better deal for the same price.
2. Considering the benefits you want
If you just automate your premium payments and policy renewal without ever actually checking or reviewing your term plan, then you are missing out in two ways. One, you may be charged for benefits that you don’t want or the ones that are no longer relevant to you. The second way is that you may actually be missing out on certain additional benefits that you could opt for at a nominal cost.
For instance, certain term insurance riders1 such as accidental death may be essential to make your insurance policy more comprehensive. This may suddenly become relevant to you, even if it wasn’t before, if you have a new job that requires you to travel a lot. Hence, you should look at your insurance policy documents to make sure that they are up-to-date with your current needs.
3. Choosing a smart policy term
One of the biggest benefits of getting a term insurance policy is that it helps your family continue with their lives without having financial struggles. A term plan, if selected strategically, ensures that your family doesn’t have to give up on their standard of living or deal with the debt burden left behind. So, if you’re thinking about how to buy life insurance wisely, then one of the most important insurance hacks is choosing the right policy term.
Typically, you should get a term insurance plan that has a longer term than the debt you are servicing or the life milestone you are planning for. For instance, if you have a home loan that you’ll be paying EMIs for the next 23 years, then you should get a 25-year term plan. The same applies to a family goal such as your children’s education. If there are still 10-15 years for your children to graduate from college and pursue their higher education, then you should get a term policy for at least 15 years.
4. Applying the ladder strategy
As the head of a family, you have multiple things to look at, from your child’s education to your and your spouse’s retirement. You may also have multiple long-term loans to take care of. Each of these loans and financial obligations may have different repayment periods and timelines. Hence, you cannot just have one term insurance policy to cover them all. Here’s when you can apply one of the popular insurance hacks of the ‘ladder’ strategy. This means buying different term insurance policies with varied periods and sum assured to cover different debts and goals.
This strategy involves buying multiple policies with different lengths so that each policy coincides with the end of repaying a large debt or financial obligation. Hence, each term insurance policy’s amount would be in place for a specific debt or a life milestone. So, in case of the untimely demise of the policyholder, the family goals can still be met and the debt can be repaid.
5. Checking Premium options
Another insurance hack you can use is considering the type of premium payment option you want to go for. Usually, term insurance plans offer two options - a one-time premium payment or an annual or monthly payment. You should see what option works best for you in terms of your income disbursement as well the charges levied by your bank, if any.
Tata AIA Life Insurance offers a range of term insurance plans, so pick and choose what benefits you. You can check the Tata AIA Term Plan online to understand all these benefits. Use the online term plan calculator to see what’s the best term policy for you. The term plan calculator allows you to set the sum assured and the policy period as per your preference and presents you with the premium amount and payment options.
Tata AIA Life Insurance offers discounts on premium for higher sum assured as well as lower premiums for women. The term plans also have the option of not just one-time premium payment but also annual, semi-annual, quarterly, and monthly payments. Everything is catered to as per your needs so that you only get the best.