Does Lowering My Term Insurance Quote A Better Option?

Term insurances are the things that no one buys with the thought of a happy outcome in mind. It is a necessity that people have to purchase keeping the possibility of some unhappy situation in mind and people do not tend to spend any extra than needed.  However, it comes immensely helpful for the unforeseen and unfortunate event of death of the policy holder when the term plan is the key rescuer from the financial distress of the family. For a plain term insurance product, the investment gives return if any death happens during the policy term. Otherwise there is no return on investment in case of the term plan. So it is a better idea to keep the term insurance quote in a limit and balance out the risk and return aspects of the policy.

Factors affect the Term Insurance Quotes include:

  • The Age and Gender – these play an important factor in the premium quote. Premium is less for healthy, young individuals compared to the older counterparts. Also, statistical interpretation indicates that women have lower age-related mortality than men. So term insurance quote for women are less than their male peers.
  • Health and Genetic Factors– This plays a major role since genetic predisposition to certain illnesses like diabetes or heart diseases make people prone to those diseases. Obesity also contributes to these factors. Insurance gets costlier for those hereditary traits and related health issues.
  • Occupation of the Policy Holder–Being in a risky profession increases the chance of death by many folds. So for those in such professions, the premium is much costlier.
  • Lifestyle Issues like Smoking and Drinking – Using tobacco and alcohol pose negative impact on health and mortality risk.

While it is a better option to keep the term insurance quote within a limit, here are the certain ways to accomplish that.

  • The Value of the Policy and its Tenure – The higher is the sum assured, the more will be the premium. Similarly, the longer the tenure, the higher the premium. Because for higher assured sum and longer tenure, the insurance company is covering higher risk of the payment and more possibility of time coverage. Though the term plan is offered between the age of 18 and 65 years generally and beyond that with special plans, but choosing not to avail it for the maximum number of years can the term insurance quote. If the term insurance quote is high, you can lower it with either lowering the policy value or the tenure.
  • Riders Add to the Quote–Selection of riders are imperative since these add-ons increase the premium. Riders should be included in the term plan considering the individual requirements and the premium to benefit trade-off.
  • Single versus Joint Coverage – Taking a joint term insurance might prove costlier since the requirements vary between the policy-holders. Sometimes is better to opt for separate individual plans to customize the requirements and proves to be more cost effective
  • The Mode of Premium Payment – Insurance companies generally provide the option for payment frequency. Premium could be paid as a single one-time payment or it could be annual, semi-annual, quarterly or monthly. The higher the frequency of payment, the more administrative charges will be levied on the policy holder. So, the better option to lower the term insurance quote and the resultant insurance charges payable — is by reducing the frequency of premium payment.
  • Mode of Purchase of Plan–If the plan is purchased online, the premium is lower compared to the charges for purchasing offline. There are several costs associated with off-line processing like commission for agents, administrative and distribution costs. So buying offline eliminates all these charges and lowers the insurance quote.

So, from the points discussed above, it is a good idea to go optimal while buying a term plan, considering the situation and the requirements. If you are young with moderate to low risk factors in your life, lowering the term insurance quote is a better idea. The policy does not have to cost a lot always. Selecting the right insurance company that will provide flexibility to modify the coverage amount and policy revision helps. And keeping the term insurance quote within a range is the better option when the purpose, requirement level and the premium amount is maintained in an equilibrium and optimised for individual’s requirement.

Recommended Read:

BENEFITS OF BUYING A TERM INSURANCE PLAN

ONLINE TERM PLAN VS OFFLINE PLAN WHICH ONE TO OPT FOR?