A Term Insurance is a must if you wish to live a worry-free life while providing for your family at the same time. Through a term insurance plan, you can protect your family’s finances even in your absence. Several people often buy the best term insurance for this sole purpose.
But it is not always necessary that everyone can afford term insurance. It can be due to limited income or high expenses, but these reasons are not enough to prevent you from having access to a better future through term insurance. The best way to overcome this financial inconvenience is by making a term plan affordable.
Yes! You heard it right. Even if plans are not cheap, you can make some changes and make those plans come under your budget range. Read on to more about five methods to easily make term insurances affordable.
Choose Specific Plans
Nowadays, insurers have a plan for every specific requirement due to the increase in people purchasing insurance plans. They have child education plans, retirement plans, endowments plans, maternity plans, and critical illness plans, all integrated with the benefits of the common term plan. You can choose any best term insurance from these categories to accommodate your financial plan. The major benefit of purchasing specific plans is that no unwanted covers are included in the plans.
The government also introduces several children, senior citizens, and woman specific term insurance. These plans can also provide a high return at a negligible premium or free of cost. If you don’t have enough money to spare for term insurance, go with government schemes to get extremely cheap rates and a larger maturity amount.
Remove Excess Covers
Almost all insurance policies will have one or the other covers that cater to different sections of society. If you feel that a particular cover is unnecessary in your case, then remove it to reduce your premium amount. By doing so, you can substantially decrease the premium rate and get the best term insurance in return.
Go For Long Term Plans
Long-term plans always have a cheaper premium rate than short-term insurance plans. So, if the plan has the option of several different duration ranges, then always go for long-duration term plans. Also, some might think that monthly payments are cheaper than annual payments. But when you calculate the total premium paid in a year, you will see that annual premiums are lower in comparison.
Add Family Members Under the Same Plan
You can also decrease the premium rate by opting for family plans or adding multiple members under the same plan. The premium rate of a combined plan will always be lesser than the total premium paid for different plans. Several multinational companies and large families opt for group term plans to reduce the per capita premium. So always give preference to plans which allow the addition of other people in the existing term insurance.
Select Plans with Maximum Tax Deduction
As discussed earlier, there are several specific plans for people from different age groups. The government of India allows several relaxations to ITR filing taxpayers if they pay insurance premiums. You can get a deduction of up to INR 1,50,000 per year in your taxable income, which decreases your tax burden. Even the final return of premium has tax exemption as it comes under the repayment category. But not all insurance policies need to come under the tax-deductible category. So, ensure that your term insurance is eligible for tax deductions to decrease your premium amount indirectly.
With a proper understanding of these five methods, you can change any plan according to your requirement. With the added benefit of the customization tool that several insurance providers have these days, you can further crack down on the premium amount.