Life insurance is extremely important for expats around the world, particularly in Indonesia. However, the cost can deter a lot of expats and they end up not having cover, signing up too late or cancelling policies early. Here are 5 ways to get cheaper cover whilst protecting your loved ones.
1. Decrease the sum insured periodically
As you get older you should be becoming wealthier and your children should be coming less dependent. An expat with two young children and 30 more years of work ahead of them has a lot more to protect than that of an expat with kids in college and just 10 years before retirement. As you push through these different life stages, your life insurance needs will change. In most cases it is advisable to reduce your life insurance cover periodically and the premium rates will follow in suit.
2. Stop smoking
Insurance companies hate smokers. If you signed up to your life insurance as a smoker then it’s likely you will have paid almost double the price of a non-smoker. The majority of life insurance providers will allow you to reduce your life insurance premiums after you quit smoking. Most of the companies that GMS use to insure expats in Indonesia will deem you a non-smoker after you have not smoked for 12 months and agree to take a nicotine test. This could save you over 40% on your premiums.
3. Get in shape
Similarly to smoking, your Body Mass Index (BMI) and other calculations of health & fitness have a great impact on your insurance premiums. Despite the many arguments of their accuracy, if your BMI puts you into an overweight category, it’s quite likely you will have had to pay a higher premium. Getting leaner [and lighter] can have a positive impact on your life insurance premiums. After all, insurance companies would much prefer to insure someone that they think will live longer.
4. Separate your protection and savings
It’s very common, particularly in Indonesia, for life insurance to be sold as protection as well as savings. This is usually called a Unit-Linked policy. The premiums are much higher than a protection-only policy as some [most] of the premium you are paying is going into stocks, shares, mutual funds etc. The reasons why GMS Indonesia are against such products is for another article but if you were to separate your two financial objectives into two separate policies your premiums will be far cheaper.
5. Start early
Financial planners around the world will say this over and over to all their clients. The earlier you start your life insurance plan the cheaper it will be. The difference in premiums of a 20 year old to a 60 year old is astronomical. Don’t leave it too late by locking in those premiums while you’re still young and healthy.
More info? Visit www.gms-financial.com/life-insurance