Let us all agree that when we start earning, we realize how vital savings are. We look forward to saving even a single penny whenever and wherever we can. So, why let go of these savings when buying life insurance?
Saving on life insurance premiums is possible without compromising on the benefits by comparing life insurance quotes provided by insurers.
But as we move to understand how to compare the quotes, let us brush up on our basics of life insurance policies.
What is a Life Insurance?
Life insurance is an agreement between an insurer and policy owner. This legally binding contract makes the policy provider liable to pay a fixed death benefit to the insured person’s assigned beneficiaries in case of an eventuality.
The best life insurance policy works two ways. First, the policyholder pays a lump sum or fixed amount at regular intervals to the insurer as premiums for the guaranteed death benefit. On the other hand, the insurance provider credits the cover either as a lump sum or staggered payout once the cover claim has been approved.
It must be noted that during the initial stages of researching policies and comparing life insurance quotes across organizations, you also must accurately consider your past and present health condition to choose the right policy.
Types of Life Insurance
As the demand for the best life insurance policy grows, so do the market and insurers. To meet the interest, there are primarily two types of life insurance. They are:
- Term Life Insurance
- Permanent Life Insurance
Term Life Insurance:
Before you get life insurance quotes for this policy type, assess if it meets your requirement. A term life insurance offers life cover for a particular duration ranging from 5 to 30 years.
An assigned beneficiary will only get the cover amount if the policyholder dies during the life term tenure. In most cases, no maturity benefit is paid once the policy deactivates or the term ends.
Permanent Life Insurance:
Life insurance quotes for this type are usually higher than term life insurance. Let us closely look at its reason.
As the name suggests, the plan offers lifelong coverage. It stays valid till the time premiums are paid. While term plans are easier to understand, permanent life insurance may be slightly complicated. It is mainly because of how premiums are paid and the rate of return is decided.
With these basics covered, you can easily choose the best life insurance policy.
Factors Affecting Life Insurance Quotes
Premiums for life insurance are not fixed. They are influenced by the following factors:
- Age: The younger you are, the lesser premium you will be required to pay. As a young policyholder, you have fewer or no health issues and are to pay the premiums for a longer duration, therefore, premiums are cheaper.
- Gender: Statistically, women live five years longer than men. It translates to a premium payment for a longer duration. And so, lesser life insurance quotes.
- Smoking: Smokers end up paying twice as much premium as non-smokers. Smoking may lead to several ailments and so higher premium rates.
- Health & Family Medical History: Important vital metrics like diabetes, cholesterol, blood pressure, and weight, among others, are recorded by insurers. A family medical history of cancer, stroke, or another serious medical condition also dictates the premium rate.
Other factors include lifestyle, financial, criminal record, profession equally influence the premium.
What to do Before Getting a Life Insurance Quote
Consider the following before deciding on your best life insurance policy:
- Calculate Insurance Needs:
Estimate your financial liabilities and resources to calculate your insurance needs. Buy a coverage that will be adequate to meet your needs.
- Carefully Analyse Insurance Providers:
Zero down on an insurer with a high claim settlement and solvency ratio.
- Keep Information Handy:
Keep information like health, family medical history, height, and other vital health metrics handy.
- Compare Quotes:
Get the best price to buy life insurance by comparing quotes from insurance providers. You can compare premiums online or in person. These quotes can be gathered for free.
Assessing your financial situation and understanding financial goals and resources all play a significant role in deciding the insurance plan for your requirements.
Also, the Indian government has established an authority, the Insurance Regulatory and Development Authority of India (IRDAI), to safeguard the interests of policyholders. Insurance providers must abide by the laws laid down by IRDAI to continue providing services to insurers.