It’s not a trick question or a marketing gimmick! And if you have been a regular reader of this blog you know that nothing in this world is FREE! But then there are exceptions – always!
Imagine this – You are 28 year old healthy non-smoking male and need an insurance of Rs 49 Lakhs for 25 years. So you opt to go for the cheapest term life insurance available – Aegon Religare – iTerm Plan. You need to pay annual premium of Rs 7,497 for this plan.
So where’s the free 25 Lakhs insurance?
Well its very simple just check the annual premium rate for Aegon Religare – iTerm Plan for 74 Lakhs insurance and what do you see it’s available for Rs 7,474 – around Rs 23 cheaper than 49 Lakhs insurance premium!
For a slightly lesser premium you get extra 25 Lakhs Life insurance isn’t it amazing.
Now picture this if you had opted for a 50 Lakhs insurance you would have paid Rs 5,050 as annual premium while you pay Rs 7,497 for 49 lakhs insurance in the same plan for same tenure. A savings of Rs 2,447 per year and extra life insurance of 1 Lakh!
Here are some more results for a healthy 28 year old male.
Insured Amount – Premium Amount
10 Lakhs – Rs 1730
25 Lakhs – Rs 3825
33 Lakhs – Rs 5049
49 Lakhs – Rs 7497
50 Lakhs – Rs 5050
74 Lakhs – Rs 7474
93 Lakhs – Rs 9393
99 Lakhs – Rs 9999
1 Crore – Rs 9400
Did you notice now the premium rates for 50 Lakhs insurance is same as that of 33 Lakhs insurance? So initially if you were planning insurance of 33 Lakhs now you can buy 50 lakhs insurance at the same premium! So here you get 17 lakhs insurance for free!
You can notice similar discrepancies in premium rate being same for 1 crore and 93 Lakhs insurance!
I really don’t know what the pricing model for insurance premiums is but
you might gain if you are a little careful and do some research!
If you too had some similar experience with any financial product please share, it would help all the readers!