How to reduce your premium

The premium that you pay depends on various factors like your age, health and lifestyle, and is calculated by complicated formulas devised by life insurance companies. At times, you feel that the premium is too high but you don’t know how to reduce your premium. The good news is that there are ways in which you can lower your premium even if you fall in the high-risk category. Some of these ways are:

1. Do your research: Premiums vary from company to company and are a function of the policy tenure and the amount insured. Several insurance sites today make it possible for you to get free competitive quotes from different companies. All you have to do is answer a few questions and get the information you are looking for. After that, you can decide which premium suits you most.

2. Opt for more insurance: The rate per $1,000 worth of insurance falls once you pass a certain amount of coverage. For example, you may take $2,40,000 worth insurance and pay $275 per year as premium; or you can buy insurance of$2,50,000 and pay a premium of $ 260 a year. It therefore makes more sense for you to insure yourself for a higher amount with lower premium -- and get more value for your money.

3. Decide to become healthy: Health can really translate into wealth for you. Quit smoking, start exercising, lose weight and what you will gain is a big saving on your premium. It is a well-known fact that your premiums are directly proportional to your health and lifestyle. Many companies charge smokers double the non-smoker rate for insurance.

4. Look carefully at riders: Adding riders to your insurance policy adds to the premium. For example, if you have riders such as accidental death and child coverage, then you need to see exactly how relevant they are to you. It is not a wise idea to pay high premium for a remote eventuality. Actually if you get down to the brass tacks you will see that many riders simply provide duplicate coverage once your minimum insurance needs are met.

5. Scrutinize the payment pattern: If you study the payment pattern carefully, you will notice that convenient monthly payments actually add up to a lot more than an up front payment. Before you choose a payment plan, do a comparative study between monthly payouts and one-time options. If a consolidated payment is possible, make one. You could be saving yourself a tidy sum.

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