Life Insurance: How to buy when tight on Budget

Life insurance Though,

Life insurance is a great financial security tool…

But not many consider it to be relevant. The reason being people don’t see any immediate impact of the policy on their lives.

Why this is so, is because…

Insurance is basically meant for the family of the insured and not for the insured himself.

Since,

Your family will be the ultimate beneficiary of the policy and you won’t see any immediate returns, you may somehow find it as wastage of your money…

And,

This gut feeling strengthens even further if people find themselves tight on budget…

But you don’t have to avoid buying insurance just because you are not available with surplus, as this will then be your another big mistake.

What are you saying...?

Instead,

You can look for more lucrative options that will be cheap, save you money and provide financial safety to the family as well.

Here is an amazing info. that will help you buy insurance when tight on budget. Consider following these steps and you will save lots…

How to buy insurance when tight on budget...?

 

Since,

There are many life insurance plans in India, thus you would need to find whether you would want to buy:

Life Insurance OR Pure Life insurance plans

Which one will you buy...?

The statement is not meant to confuse but to bring clarity…

  • Life insurance plans are usually a mix of Insurance and Investments… but
  • Pure life insurance plans on the other hand only provide you with insurance benefits.

Since pure life insurance plan will be a pure Life cover plan thus it will come a lot cheaper than as compare to other plans in the market.

Do you know…?

Premiums for life insurance plans can sometimes be 10 times the premium of pure life cover plans…

This is because they are Insurance cum Investment plans. They keep half of your premium for insuring you and other half to invest on your behalf.

If you can take care of the investment part yourself then for people on tight budget pure life cover plan would a better choice.

Yes I can take care of my invesments

Thus,

The very first thing you could do to save your money and still have insurance in the process is to buy a pure life cover plan.

Pure insurance plans generally come in the form of “Term plans” that keep you insured for a certain period. They are also one of the cheapest plans available. But this is not there only benefit…

They also offer:

  • Flexibility in paying premium: You would be able to choose whether you want to pay monthly, quarterly, half yearly or yearly…
  • Flexible term: Term insurance will work best if you are tight on budget. This is because they offer flexible time for which you want to stay insured. With them you can stay insured for as minimum as 5 years and that too for a minimum sum of Rs.10 lac. Here is the file snapshot from Policybazaar.com. Here for a sum of Rs.10 lac you only pay Rs.145/- monthly towards your premium. It can’t get better than this…

 

Cheapest insurance plan with flexible term

 

  • Savings on Tax: Having term insurance brings you with tax benefits. You can save tax under section 80C and Section 10(10D) of Income tax act 1961. In total you would be able to save a sum of Rs.1.5 lac by just buying an affordable insurance plan. Check out this…

 

Life insurance

 

Term insurance can be really helpful if you want to save your corpus. To know more on them you can read this post. If you are interested in buying cheap, affordable and money saving insurance plans then you can check out these top 5 companies:

  1. ICICI Prudential,
  2. HDFC Life
  3. Max Life Insurance
  4. Bajaj Allianz
  5. SBI life

Cheapest term Insurance plans you can look for are:

Cheapest Term Insurance Plan in India
CompanyProductPremiumClaim Settlement Payout
Bharti AXAeProtectRs. 3790/-80.9%One time: Rs. 50 lac
Reliance Online termRs. 5335/-83.8%One time: Rs. 50 lac
Edelweiss Tokio MylifeRs. 5705/-57.1%One time: Rs. 50 lac
Aegon ReligareItermRs. 5757/-89.8%One time: Rs. 50 lac
Max lifeOnline Term planRs. 6043/-95.5%One time: Rs. 50 lac
India firstAnytime planRs. 6213/-72.2%One time: Rs. 50 lac
HDFC lifeClicktoProtect Plus (Income option)Rs. 6264/-90.5%One time: Rs.5 lac.
Monthly: Rs.41.66 K for 15 years.
Pnb MetlifeMera Term plan Rs. 6555/-92.9%One time: Rs. 50 lac
Birla Sun lifeProtect@EaseRs. 7639/-95.5%One time: Rs. 50 lac
ICICI PruiProtectRs. 9291/-93.8%One time: Rs. 50 lac
SBI life eShieldRs. 9759/-89.4%One time: Rs. 50 lac
Bajaj AllianziSecureRs. 10,005/-91.9%One time: Rs. 50 lac

Other measures to cut on cost of Insurance…

1. Buy when young:

If you want to save on insurance then the best thing you can do is by not making any further delays.

Do you know…?

You can literally save 5 times on your premium if you buy in your 20’s.

Don’t believe me…! Check this out.

Insurance policy when you are in your 20's

Insurance premium when you are in your 50's

Here I am taking an e.g. of Sudhir and Varun aged 25 years and 50 years respectively. There premium amounts as per policybazaar are:

  • Sudhir who is 25 years in age pays Rs.2900/- approx and
  • Varun who is 50 years old pays 4 times of Sudhir’s premium.

You may be wondering why this is so…?

The reason being,

People in their older age tend to get sicker than their younger counterparts. Since more money will be spent on their maintenance thus higher premium is charged from them.

2. Shop for Insurance quotes:

Another way you can save money on your insurance is by comparing quotes. You can get many insurance providers offering the same product for less.

Look for the best option

In the olden days getting and comparing quotes from different insurance companies was a herculean task. Either you used to make calls in different companies or hire insurance agents to get premium quotes. But things were not that reliable.

But with the advent of technology and emergence of insurance aggregator sites, today lives are much easier. All you need to do is add your age and few other details and you would be able to not only calculate premium but get quotes from every insurance company.

Comparing quotes is really important as it gives you plenty of other info. as well. You would be able to know their claim settlement ratio, maturity period, payment flexibility etc.

Thus,

Make sure you shop for insurance quotes before buying one.

3. Quit bad habits:

Be a non smoker

Shopping for insurance, many a times you would have come across a column asking whether you are a smoker or not.

This is for a reason.

Insurance companies consider a smoker at higher risk of dying. Even studies prove the fact that,

“Smoking Kills”

Check out the article from Medicalnewstoday.com which shows how:

“Smokers die 10 years sooner than Non-Smokers.”

They also show that:

“Smokers mortality rates are 3 times greater than Non smokers.”

Since,

Smokers will always have issues related to their health, thus premiums charged from them are generally higher.

If you can quit your bad habits then you can certainly save money on your insurance.

4. Buy online:

Online plans are cheap

It is generally said that your insurance agent’s commission is charged from you. But, how about not involving them…?

Though you won’t get the best insurance advice but you would end up saving a lot every month and every year by buying online.

Insurance agents are certainly necessary in helping you choose the best but if you have time and resources then there is always everything available on net. Study yourself and you would surely find the best.

When you purchase insurance online then you eliminate the involvement of your agent and save on commission. Buying online also helps you reduce not only the cost but minimizes any time delays as well.

5. Go short:

Go for shorter term

This is something you can manipulate.

Insurance when bought for longer term is generally beneficial. This is because your premium quotes are then locked for longer time frame.

Since your quotes will not change till its active, thus insurance companies in the factor-in the element of time when you buy. This time factor when enters in your plan then this raises your premium.

Thus,

If you want to stay affordable then its better you go short and save that extra penny.

You don’t want to avoid Life Insurance in any situation. Thus buy it as it will only reap you benefits…