Understanding the Importance of Paying Life Insurance Premium
There are many things about premium-related insurance policy that are less understood by a lot of people. Knowing the basics about premiums can help you choose and keep a particular life insurance policy.
Meaning of Life Insurance Premium
The term insurance refers to the contract that binds the life assured and the insurance company. Thus, each contract should be applicable under the law should include valid consideration. For this reason, premium is the condition that should make the contract complete.
Premium Paid in Advance
The term premium should be paid in advance which can be done through cash, check, and other valid instruments. In fact, other insurers have given way for paying premiums online as an option for convenience.
Discounts Offered on Premiums
Premium being offered on the basis of discount by companies can be paid on the sum assured basis and the mode of payment of premium. Such discounts are referred to as rebates.
Online Payment Rebates
Basically, insurance companies offering service cost for premiums that are paid online can be lower compared to those paid on other means. This has been made possible due to the fact that companies can save on commissions being paid to agents when policies have been sold. So, for some companies, there are rebates being given already even before the premium payment rates done online have been quoted.
Decreasing and Increasing Premium
The term decreasing premium should be applicable in policies of mortgage redemption in cases. This happens where the premium will go down as the outstanding loan amount of the policy holder decreases.
These are just a few of the many benefits of paying life insurance premiums to specific insurance companies. Perhaps this can increase your knowledge about the term premium and how it can affect your life once and for all.