How To Buy Life Insurance On A Budget?
Life insurance may often be bought as a financial security net for loved ones, so that they may be able to cope with any significant loss without having to face financial distress in your absence. To buy a life insurance plan, one needs to pay a premium. Premiums may be paid as a lump sum or may be paid monthly, annually, or quarterly, depending on the choices offered by the insurer and what you choose.
The premium depends on a number of factors like gender, age, policy term, lifestyle, occupation, coverage preference, etc. It is important to choose the sum assured carefully. The life insurance policy you buy may prove to be of little use if the sum assured is lower than required. However, it is also essential to ensure that the premium amount is affordable.
If you are keen on buying a life insurance plan within your budget, you may do so by first understanding the factors that affect premium costs in a policy. Some of these factors are sum assured, policy duration, riders added, type of policy chosen, etc. Furthermore, there may be a few tips you might be able to utilise to help you find the suitable life insurance plan within your budget.
Here are few ways through which you can buy Life Insurance under your budget
Buying a life insurance plan as per your budget need not be difficult if you go about the process with a methodical approach. Here are a few tips to help you find a budget-friendly life insurance plan:
• Understand the need for life insurance
While the financial security of the family may be a common goal, remember that various types of life insurance plans offer different features. For example, ULIPs act as investment plans while offering a life cover alongside. This may make them more suitable for buyers who may want to use their life insurance plan as an investment plan as well. However, if you are not too keen on buying investment related plans and want to focus on getting a pure life insurance plan, you may like to opt for a simple option, such as a term insurance plan. Keep your goals in mind when deciding on which type of life insurance to buy.
• Determine your Sum Assured
When buying life insurance, it is important to consider your sum assured. It is the amount that your nominee may receive if they were to make a claim under the plan during the policy tenure. Once you know your sum assured, you may then adjust the other aspects of the policy to ensure that you have a suitable life insurance plan.
• Choose the suitable Policy Term
Alongside the sum assured, choosing the suitable policy duration may also be important. You ought to ensure that your life cover lasts for at least as long as your financial responsibilities do. The duration of the policy is also one of the aspects influencing the premium of life insurance plans. You may use an online calculator corresponding to your plan to see how the policy duration may affect the premium amount. Choose a plan that can offer you a cover for as long as you seek, while also being affordable.
• Find the suitable Deal for You
When buying life insurance suiting your budget, what may suit someone else may not necessarily fit your requirements. Thus, you should look for the plan and specifications that are suitable for you. For example, term insurance may be apt for you if you are looking for a simple plan that offers life insurance alone. However, you may want to go for a whole life cover if you want your coverage duration to be more than what a term life plan may have to offer.
• Buy a Policy Early in Life
Life insurance premium costs can vary with the age of the person insured. For example, a 20-year-old person buying a life insurance plan may be more likely to find cheaper one, as compared to a 50-year-old person looking for it. This is because older people may be at a higher risk of mortality as compared to younger individuals. Thus, if you want to buy life insurance on a budget, it may help you to buy it when you are younger, as premium costs may go up as you grow older.
When buying a life insurance plan, keeping the above tips in mind may help you find a plan within the limits of your budget. Focus on choosing a plan that is right to serve your purpose, while also ensuring that it does not add to your stress today.
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