It is often heard that outlining a budget for your expenses helps you keep track of the money you have earned. Knowing where you spend is important to optimise savings as it helps you cut down on unnecessary expenses to plan for unforeseen ones. In your journey to improve and enhance your financial well-being to better secure your future, Tata AIA is among the few reliable and well-known life insurance companies that offer a range of suitable life insurance options designed to not only help you save money, but also address your personalised insurance requirements.
 

While we all strive to know how to save money on life insurance, the best advice would probably be to purchase it young as the premiums are lower when you are healthier.
 

When should you Consider Buying Life Insurance?
 

While the right time to go buy insurance varies from person to person, it largely depends on family and financial circumstances. Generally speaking, you will require life insurance if you have someone who is financially dependent on you, or also if you are in debt that would require pay off even after your demise. Ideally, because life insurance is a critical component for financial planning, it is wise to buy it the moment you have a dependent who relies on you for financial support. This could be a spouse, aged parents, or a child.
 

Additionally, if you are looking for the apt life insurance, buy it when you are young. This allows you to pay lesser premiums which is beneficial in the long run because the older you get, the more expensive your insurance becomes. In some cases, this might even disqualify you from purchasing insurance altogether, which leaves you to bear the burden of colossal expenses if something unfortunate were to happen.
 

How to Buy Affordable Life Insurance?
 

It is understandable that you don’t want to spend a fortune on life insurance policies and still want to enjoy the peace of mind that comes with a financial cover. To help with both these objectives, we have mentioned some preparations that you can involve in purchasing life insurance based on your budget. Here are some pointers that will guide you on what to consider when buying life insurance and how to save money on life insurance:
 

• Analyse your income: Indians have traditionally been savers and in keeping with this tradition, undertake an analysis of your income to know how much you save every month. It is important to not fall into the trap of overestimating the coverage that you can buy. Know your total income and make calculations based on your net income (in-hand income) and not your gross income. In case you are self-employed and have an irregular income, calculate based on your weekly incomes of previous years. Be logical and realistic before arriving at a figure which in turn will ensure that you purchase insurance that you can afford.
  
  
• Review your expenditure: Divide your expenses into fixed and variable ones. The former includes necessary expenses such as EMIs, car payments, etc., whereas the latter involves electricity bills, groceries, and entertainment. 
  
  
• Set clear goals: When you take your income and expenditure into consideration, it becomes easier to focus on your savings. Generally, with budgeting, follow the 50-30-20 rule meaning 50% of your income should be kept aside for fixed expenses, 30% of it for your varied expenses, and 20% of it for your savings. Your savings will determine the life insurance plan you should purchase.    
  
  
• Ask questions to experts: Visit a financial expert and discuss the financial pillars that may be affected when you pass away and be sure of the financial future that you want to create. It helps to determine exactly how much life insurance coverage you need. Ensure you buy coverage, based on your exact requirements, while considering inflation and lifestyle changes. Ideally, it should be 8x - 10x your annual salary in benefits to cover your family’s needs which means that you will have to pay 2-5% of your salary annually on coverage.
  
  
• Keep reviewing: Lastly, just buying an insurance cover is not enough. Considering the constantly changing demands of life, it is prudent to review your policy at regular intervals. Carry out a monthly and yearly review and be flexible and willing to adjust wherever necessary.
   

Term Life Insurance: The Most Budget-Friendly Life Insurance
 

The oldest and the most popular types of life insurance policies are term life insurance and whole life insurance. Although life insurance companies have expanded their horizons with a broader range of plans, for most people, the best affordable life insurance to date remains term life insurance.

What is Term Life Insurance?
 

As suggested by the name, term life insurance secures you financially for a pre-determined period. It comes with a promised death benefit, which is paid to the beneficiary in case of your unfortunate demise during the policy term. Term life insurance owes its popularity to three crucial factors that are:

• It is one of the apt life insurance coverage that you can buy.
• It offers extensive life insurance coverage.
• It is a pure life cover, with no frills attached, which makes it easier to understand.

 

Some of its drawbacks include that regular term plans offer limited coverage of maximum 40 years.
 

Tata AIA Life Insurance understands these drawbacks and offers 4 feature-packed term insurance plans, some of which offer the option for life insurance coverage for up to 100 years of age.
 

The key features of Tata AIA Protection Plans include:
 

1. Life Cover up to 75 years which is extendable for the whole life (up to 100 years of age)
2. Flexible premium payment modes
3. Multiple and convenient payout disbursement modes
4. Option to enhance coverage with a set of riders^@
5. Tax benefits on premiums paid and death/maturity benefit as per applicable tax^# laws.
    

Conclusion
 

When you consider purchasing a life insurance policy, instead of blindly selecting a life insurance company, you have to think of and calculate how much coverage will be needed by your family and thereby determine how much coverage you can afford. Cost is definitely a driving factor while buying any financial instrument, as the premium outflow is a major expenditure. However, the focus should be on getting optimum coverage at cost-effective rates.
 

To conclude, because life insurance is a financial cover that would shield you from uncertainties of life, it is important to review the policies available and choose the one that suits your needs best.
 

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