Thursday , August 11 2022
Insurance Premiums Payment

What Do You Need To Know About Your Insurance Premiums?

Insurance premiums are the payments that you make to your insurance service provider. This is a particular amount, and it varies from person to person pertaining to many factors. You need to make insurance premium payments on time, as there is a chance that your policy could lapse, and you could lose your protective cover.

What Determines The Insurance Premiums Payment?

The insurance premium amount is determined at the time of the drawing of the policy. It remains constant throughout the tenure, as it is mentioned in the insurance policy documents. Following are the factors that become determiners in deciding your life insurance premium:

  • Type of cover:

Insurance cover refers to the protection that is provided for specific things. The details of all the covered aspects are mentioned in the policy. The more comprehensive policy will attract more premium amounts, as it provides cover against most things. Less coverage will attract a lower premium.

  • Your age:

When it comes to life insurance, your age plays an important role. Insurers determine premiums on the basis of the risk factor involved, and people of lower age are considered as lower risk. Therefore, the insurer will levy a lower premium amount.

  • Lifestyle:

Your lifestyle is a huge determiner of the risk factor. Suppose you are an outdoorsy person who indulges in adventure sports or unhealthy habits such as consumption of drugs, alcohol, or any other controlled substance. In that case, this will attest that your lifestyle is risky and will attract a higher premium amount.

  • Gender:

In India, women get the same insurance policy with a lower premium rate. Some insurance policies are curated explicitly for certain people. If you fit the eligibility criteria of that policy, then you will attract a lower premium.

  • Coverage amount:

Insurance premiums are dependent on the coverage amount. Insurance premiums will be lower if the policy is comprehensive, but the coverage amount is small. More the coverage amount higher will be the premiums.

  • Payment frequency:

Most insurers grant autonomy to the policyholder on the insurance payment frequency. You can choose from monthly, quarterly, annually, and bi-annual. Depending upon your choice of payment frequency, the insurer will set your premium amount.

  • Tenure:

Like all other policies, insurance also has tenure. Tenure is the time frame for which an insurer provides you with the protective cover. If the tenure is longer, then the premium will be lower and vice versa.

Who Determines The Insurance Premiums?

At the time of drawing up the insurance policy, the insurer takes all the above-mentioned factors into consideration and calculates the premiums. Before finalizing the documents, some insurers allow policyholders to negotiate the premium amount. After reaching the agreement, the premium will be set. Some insurer, after calculations, decides the premium amount. Either way, the premium amount is mentioned in your insurance policy document, along with the frequency and the date on which you need to make the payment.

How Can You Make Your Insurance Premiums Payment?

Following are the different modes through which you can make online insurance premium payment

For online payments

  • Visit the official website of your insurer.
  • Navigates through the website for the insurance premium payments.
  • Mention your policy number or the customer ID
  • Feed in the premium amount
  • Pay via net banking, credit or debit card, or UPI ID

For offline payments

  • Visit the local office of the insurer
  • Meet with a concerned person
  • Make payment via cheque or cash

some insurers also send their personnel to your home or office to collect your insurance payments.

Digital wallets

This is also a part of the online payment mode. If you do not wish to make payment using the website of the insurer, you can make payment via digital wallets. These are apps that you can download from the play store or app store and easily make payments. Apps like MobiKwik allow smooth payment options. You can use it for almost all insurance service providers like max life insurance premium payment. The payment will be made in a matter of seconds.

What Happens If You Fail To Make Your Insurance Premiums Payment?

Insurance premium payments are mandatory, and all the policyholders are required to make them on time., but if because of any reason you fail to make payments for a certain period of time, then the insurer offers you a grace period. During this grace period, you can clear all the due payments. Before the grace period, your policy doesn’t lapse. Even after the grace period is over, if you are unable to make the payments, then your policy lapse. The grace period varies from insurer to insurer. The usual grace period offered by most insurers is three months.

Conclusion

Life insurances are one of the safest investment options that also provide protective cover for you and your family in times of emergency. Therefore, before making any commitment, examine all the factors. Compare options available to you. This will help you make an informed decision so that you do not regret anything.

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