Life insurance is an important aspect of your life as it assures your family and loved ones of financial security in the event of your death. Given the unpredictability of life and the fact that you might be the sole breadwinner of your family, it is a good idea to educate yourself on the benefits of life insurance at the earliest. With the advent of technology, it is now relatively simple to go online and peruse various plans with the lowest life insurance rates which are offered by different companies, each with their own set of terms, conditions, penalties, and payouts.
Benefits of Getting Life Insurance
There are a number of reasons as to why life insurance is a good future planning option for families. Apart from the obvious financial stability offered, life insurance plans enable one also to draw loans against insurance, which are ideal for those who might have emergency expenditures to incur such as hospital bills. Insurance provides credibility and collateral which enables quick borrowing.
Another benefit involves loan and expenses repayments, which can otherwise burden a family. Planning a life insurance policy early in one’s life will ensure that sudden loans taken will be returned and that emergency or necessary expenses are managed without the need for a loan in the first place. This enables families with children to consider insurance plans which involve saving or investing a certain portion of the premium in an education-related plan.
Furthermore, life insurance involves tax benefits under the Income Tax Act. In the event that one chooses to invest a certain amount in an insurance policy, a number of tax deductions can be obtained based on how high the monthly premium is. Therefore, the higher the premium paid per quarter, the lower the income tax one will have to pay. This tax-deduction benefit of insurance enables one to invest wisely and is also used by insurance companies who will offer higher tax deductions for lower premium payments.
Life Insurance Rates Are Not Uniform
It is not uncommon to note that upon perusal, the numbers pertaining to life insurance rates and premium payments vary depending on the company which is offering them. Competing companies often use a variety of methods through which they hope to entice and engage with customers in order to acquire their loyalty.
Varying Rates Based on Specific Plans
Life insurance rates are based on the profile and risk assessment of an individual customer; therefore your age, lifestyle habits, health conditions, family medical history, and gender come into play. For those who have specific genetic diseases or have lifestyle habits which could be detrimental to their health such as nicotine consumption, the rate is likely to be higher. For customers who are of advanced age and stand the risk of acquiring age-related diseases, the rate is high, but many companies offer special rates for senior citizens.
The ideal time to get the best life insurance rates is when you are employed and are between 28 and 40 years of age. It is also a good idea to maintain as clean a bill of health as is possible in order to do well during the initial assessment and health screening which is carried out by companies prior to their offering you policy options.
A number of companies which offer life insurance policies also have their own screening processes and have categories called risk assessment profiles. These risk assessment profiles are used to categorize customers based on certain prerequisites; this profiling process will then be used to customize policy plans for the customer. Lower risk customers are naturally offered lower rates while those in the higher risk assessment category will need to pay more.
Decisions Based on Certain Benefits and Riders
Certain life insurance policy rates also vary based on the type of plan you are opting for, and also on the optional services which may invite additional payments. For example, certain companies enable a portion of the policy payout to be advanced in order to pay for the funeral expenses of the policyholder in order to allow the family to be spared the hassle of organizing last minute loans for the purpose.
Other options available to customers include benefits such as disability benefits in the event that you are unable to work for 90 consecutive days. As part of this option, up to 12 months of your personal insurance premiums are paid.
Some companies also offer policy plans with moderately higher rates for customers who are at risk of acquiring or have recently been diagnosed with a terminal illness. As part of this policy plan, the payment of the entire amount invested is paid out prior to your demise. However, it should be noted that it is important to discuss this policy plan in advance with your life insurance company in order to have all papers and prerequisites ready. As of the present day, only a select few insurance companies offer this service for customers.
Market Conditions and Competition
Life insurance rates are dependent on variable market conditions and competition. With so many companies competing for customers to opt for their policies, it can safely be assumed that life insurance rates will not fluctuate very much, however it is a good idea to take a few steps in order to be updated on news regarding exceptionally attractive rates and policy plans.
A number of companies are now offering packages in context with life and health insurance through which they enable lower premium payments per quarter for maximum payout benefits. In order to be eligible for this, the policyholder must fulfill the prerequisites set by the company. These prerequisites include qualifying in terms of having a stable financial background, and a clean bill of health as per their health screening process.
It is a good idea to opt for life insurance within your mid 30’s at the latest in order to receive the lowest life insurance rates available in the market.