7 Tips to Pay Lower Premium for Term Insurance Plans
Ever wondered how do insurance companies determine the payable premium for a plan? Well, several factors are taken into consideration to arrive at the final figure. Out of all the factors, there are some that are under your control while some are not.
By directly or indirectly altering these factors we can reduce the term insurance premium. Now the question arises what are these factors and how can we control them to modify the price of term insurance plans in the UAE.
In order to answer all your queries so that you get the best term insurance at the best price, in this blog, we will 7 tips to pay lower premiums for your term insurance plans in the UAE.
Maintaining a Healthy Lifestyle
Maintaining and following a healthy lifestyle is not just beneficial physically but also financially. Exercising regularly, eating a balanced diet, practicing yoga/meditation while refraining from habits like consuming alcohol and tobacco will lead to a healthier body and mind which reduces mortality risk. While opting for insurance, providers ask questions about smoking and drinking habits to assess the mortality risk which plays a crucial role in determining the term insurance premium.
If you are a non-smoker and non-drinker without any diseases you will have to pay a lower premium in comparison to a smoker/drinker. This is mainly due to the fact that these habits reduce human life and tend to cause a variety of life-threatening medical conditions.
Type of Job Profile
Another important factor that plays a key role in determining your term insurance premium is your occupation. According to the thumb rule of insurance, the less risky will be your profile the lower will be premium and vice versa. Now, if your line-up of work involves risks such as fire-fighters, miners, deep-sea divers, bomb defusal squads, etc. there is a high probability that the insurance might not offer coverage or will charge a higher premium. People working in regular nine to five jobs have a low-risk profile and therefore get term insurance at lower premiums.
Term and Value of the Plan
A major reason behind the popularity of term insurance plans is that they are affordable and the buyer can choose the term of policy based on their choice and convenience. In most cases, the longer the term of the policy and the higher the sum assured of the policy higher will be the premium.
This means a policy covering you for five years will cost you less than a policy that covers you for ten years. This is mainly due to the fact that longer the policy will be covering you, the higher will be the risk of receiving the claim. Moreover, a high cover amount means that the insurance provider is at a higher risk of paying the amount. By reducing any of these factors you can easily manage to reduce your term insurance premium in the UAE.
Every insurance company offers riders that are designed and developed to enhance the protection quotient of term insurance plans. There is a wide array of term insurance riders such as critical illness coverage, terminal illness coverage, waiver of premium, personal accidental benefit, etc. These riders do enhance the protection offered by the basic plan but this additional coverage comes with an additional cost. In case you feel that you are paying more than your decided budget you can remove these riders from the basic plan and save money on the payable premium.
Online vs. Offline
Term insurance premiums that are charged online are usually lesser than is what is to be paid when the policy is purchased offline or via any third-party/agent. This is mainly because online sales operation helps the providers to eliminate the commission, administrative and distribution costs. Technically, the decision of purchasing term insurance online or offline should depend on how much advice you need while buying the plan.
Mode of Premium-Payment
Different insurance providers offer different schemes based on the premium payment mode. In most cases, you can save some money on the term insurance premium if you make the payment in one-time as it cut-downs the administrative and management cost associated with the purchase. On the other hand, if you make the payment of the term insurance policy in instalments that broken down you will end up paying extra money.
Most of us do not realize how obesity not only affects us physically but also financially. People with high body mass index (BMI) are more likely to suffer from cardiovascular, and other medical conditions such as diabetes which increase the payable term insurance premium. If you want to get a good deal on your insurance plan it is important to manage your body weight and fat percentage.
In a Nutshell
With the above-mentioned factors, you can manage to control the premium of your term insurance plan in the UAE. Before making any decision make sure you compare quotes from different providers to get the best deal at the best price.