Ever wondered if it is possible to reduce the cost of your insurance expenses? In this article, we share four ways to lower your insurance expenses.
#1 Pay on an annual basis
Did you know that adjusting your premium payment frequency can help you to pay less for your insurance policy? While there is the option to pay premiums on a monthly, quarterly, or half-yearly basis, opt for an annual payment if you would like to pay less. This is because an annual payment could save you approximately 3 per cent as compared to a monthly payment.
(See "Don't Need A Full Critical Illness Plan? Here's Your Alternative")
#2 Adjust your premium payments
Additionally, some policies may also offer a limited pay option (i.e. pay for a specified period instead of paying for every year of coverage). For such policies, choose a longer premium payment period if you would like to pay lower upfront fees. For example, a payment period of 20 years will have lower upfront annual premiums as compared to a premium payment period of 10 years).
Alternatively, adjust the number of years that the payment is required if you would like a lower lifetime premiums paid. For example, a policy with a 10 year limited pay period will have a lower lifetime premium than a policy with a 20 year limited pay period.
Years to pay |
10 |
15 |
20 |
Annual premiums |
$2,119 |
$1,562 |
$1,320 |
Total lifetime premiums^ |
$21,199 |
$23,434 |
$26,400 |
^Calculation does not take into account present and future values.
*Profile: Age 35 non-smoker male. Premiums shown are rounded down to the nearest whole number. Accurate as of 22 February 2021.
(See "Am I Ready To Retire?")
#3 Quit smoking
Did you know that smokers usually pay a higher premium for insurance as compared to non-smokers? This is because smoking is associated with a higher probability of health issues and thus smokers are seen as of a higher risk to insurers. Therefore, if you would like to reduce your insurance expenses, one way to do so is to quit smoking.
(See "Is Your MINDEF Group Insurance Really The Cheapest?")
#4 Review your insurance policies
Another way to reduce your insurance expenses is by reviewing your existing policies. This is because policies you bought when you were 30 years old may no longer be suitable for your needs at age 50. By doing a regular review of your existing policies, this ensures that your policies address your needs and prevent you from overpaying for coverage.
You may also compare your policies or seek a second opinion to see if there is a better alternative for your protection needs.
(See "Are you paying too much for your car insurance?")
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