Has insurance premium become a burden now? On Insurance Awareness Day, experts suggest simple ways – like top-up plans, monthly instalments and co-payment options – to reduce expenses without losing cover.
Insurance is the first wall of financial security for every family, but when the monthly budget starts stretching, the first thing that is thought of is cutting down on this expense. Many people are unable to pay the premium on time and their policy either lapses or continues with less cover. But is there any way to reduce the premium, maintain security and also not put a burden on the pocket?
Today, on the occasion of Insurance Awareness Day, experts have suggested some practical and effective measures, which can become a solution to the big problem of common policyholders.
Insurance can become cheaper with smart planning
In today’s era, maintaining insurance amidst changing priorities and inflation is definitely challenging, but not impossible. Insurance sector experts believe that with a little smart planning and some changes, you can continue your policy and also reduce the premium. This includes options like taking an online policy, using a top-up plan, choosing a monthly or quarterly payment mode or removing some unnecessary riders.
According to experts, insurance should be viewed as a life-changing strategy rather than a ‘one size fits all’ policy.
Combine policies, go online and buy insurance early
Jude Gomes, MD and CEO of Ageas Federal Life Insurance, explains that even though insurance may now seem expensive, there are ways to manage costs wisely. He says changing financial priorities and rising expenses can make it difficult to continue paying insurance premiums, but there are practical ways to control costs without compromising on protection. CEO Jude Gomes advises to prioritise basic protection insurance, which offers good coverage at a low cost. He says paying premiums annually can reduce administrative costs and sometimes even offer discounts. Adopting a healthy lifestyle improves insurance rates, as insurance companies reward people with lower health risks. Buying insurance early also reduces the premium due to a lower risk of death. Buying policies online reduces distribution costs, making the policy affordable.”
For those who are juggling multiple policies, Gomes recommends consolidating policies to make management easier and reduce costs. “Consolidation simplifies management and increases cost effectiveness,” he says.
Flexibility: Payment options and top-up plans for easy cash flow
Flexibility in payment modes is also important in managing insurance costs. “Switching to monthly or quarterly premium payments can be an effective way to ease immediate cash flow issues. Those who are unable to afford a higher cover at the moment can gradually increase protection and maintain financial stability by taking top-up plans later,” Gomes explains. CEO Jude Gomes says, “We as insurance companies have a responsibility to help customers make informed and sustainable decisions.”
Smart ways to have health insurance: Use co-payment and room rent riders
Ajay Shah, Head – Distribution, Care Health Insurance, shares a similar opinion, especially when it comes to health insurance. He says that premium costs can be controlled sensibly without losing out on essential coverage. He says that everyone wants their premium to be affordable, but that does not mean compromising on comprehensive protection. He recommends opting for options like co-payment clauses or sub-limits to reduce premiums at the time of buying the policy. “These can lead to lower premiums as the policyholder has to pay the fixed amount at the time of claim,” explains Shah. “It is important to read the terms and conditions of the policy carefully to have a full understanding of these clauses.”
He adds that he recommends switching to a monthly or quarterly payment mode to maintain cash flow and to pay through a top-up or super top-up plan. Extending cover at an affordable cost. “These small but strategic changes can help policyholders stay financially secure, no matter what the circumstances.
Case study: Smart customisation saves up to 36% on premiums
Shah shares an example of how smart changes can significantly cut down insurance premiums. He says if a 65-year-old person buys a health insurance of Rs 10 lakh, his premium comes to Rs 35,088. But if he opts for the co-payment optional rider, the premium reduces by about 16%,” Shah elaborates. If you add riders like ‘Smart Select’ (selected hospital network) and ‘Room Rent Modification’ (single private AC room), the overall premium reduces by 36%, making it very affordable for the customer,”
Simplify, top-up and trim: Tips for smart insurance
Frio co-founder and CEO Kunal Verma believes that insurance should not be viewed as a burden. He says that if annual premiums seem heavy, then adopting monthly or quarterly payment modes can reduce this pressure and also maintain protection.
He advises removing unnecessary riders or adding top-ups to the base plan so that costs are controlled and protection is also maintained. Verma says that we have seen that young professionals take a base cover of Rs 5 lakh and add a top-up of Rs 20 lakh, which keeps the premium low and provides good protection.
“Similarly, a family of four switched from annual to monthly payments and removed some repetitive riders, saving around Rs 7,000 annually, without losing any of the core benefits.” He assures policyholders: “With a little planning, you can strike the right balance between your budget and peace of mind.”
