How to Save Money on Life Insurance Author:    Posted under: Life InsuranceLife Insurance questions answered

Life insurance is an essential financial product. For those who are struggling in this economy, it doesn’t make the top of the list of their priorities. In fact, it usually doesn’t make it to the list at all. If you’re thinking that your money could better be used for your daily needs because life insurance is just too expensive, know this: just as there are a variety of life insurance companies and life insurance policies to meet your needs, there are various ways that you can save on life insurance.

1.  Comparison shopping. There are literally hundreds of insurance companies offering a wide range of products for you to consider. Additionally, the premiums on similar policies vary significantly from one company to another. You can either look for a reputable agent to help you or explore your options on your own. Free online insurance quotes are available with a few clicks of your mouse. It will make it easier for you to make an informed decision when you have different quotes side by side to compare which companies and policies will be better able to give you more value for your money. Although not all online insurance quotes will be able to give you the lowest possible rate, they will still be useful in terms approximate figures.

2. Buy as early as possible. The older that you get, the higher your life insurance premiums will be. This is because the probability of imminent mortality for someone in his 60s is significantly higher than that of someone who is in his early 30s. Don’t wait for too long before you decide to purchase a life insurance policy – the longer you put it off, the more it will cost you in the long run.

3. Get healthy. Most, if not all, reputable insurance companies conduct physical examinations to determine an applicant’s health status. Signs of high cholesterol levels, high blood pressure, detection of diabetes and heart disease are likely to result in high premiums. If you are overweight, smoke (cigarettes, pipes, cigars or marijuana) or have pre-existing conditions, make lifestyle changes right away. Start exercising regularly and watch what you eat to get back in shape. Quit smoking and take your medications regularly. An important thing to note when shopping around: some insurance companies will only consider you as a nonsmoker if you’ve never smoked at all. Others will require you to be nicotine-free for a set amount of time to attain a non-nicotine rate.

In some cases, you will find that the changes you make to your lifestyle will save you thousands of dollars in the end.

4. Buy only what you need. Moderation is key. You don’t want to buy too little insurance coverage, but you also don’t want to buy too much. Figure out what you need. Where are you in your life right now? Are you newly married? How much coverage will you need to sustain your spouse’s lifestyle when you’re gone? Do you have a brand new baby? Have you considered how much money you will need to set aside for his care? For his college education? Do you own a home and are still paying mortgage? It’s important to consider these life changes to sufficiently provide for your family’s needs in the event of your death.

However, if you’re young, single and with no dependents then it might be wise to skip the life insurance for now and bank your savings instead.

5. Buy from a financially-sound company. Look for one that has an “A” rating or higher from rating agencies such as A.M. Best, Duff & Phelps, Moody’s, Standard & Poor’s, Fitch Ratings and Weiss.

6. Explore your payment options. Insurance companies will give you the option to make monthly, semi-annual, or annual payments on your premiums. Although a majority would opt to pay small amounts on a monthly basis rather than shell out a lump sum, they are paying more money than they think. There are fees and other charges associated with monthly payments. If you are able to, pay annually to avoid these surcharges.

7. Skip guaranteed issue policy if you’re healthy. These policies require little to no medical exam. This is riskier for insurance companies, therefore, more expensive. Guaranteed issue insurance policies are usually purchased by people who have been unable to obtain life insurance due to medical problems that are considered high risk. In some cases, you might be paying more in premiums after a few years than your family might even receive from the death benefit.

8. Consider riders as opposed to a new life insurance policy. As your needs change, you will likely feel like you need more life insurance coverage. Before you run out and buy a new life insurance policy, consider adding riders to your in-force policy instead. It will let you expand on your coverage and it is a lot cheaper than buying a new policy.

9. Regular reevaluations. If, for health reasons, you are paying higher premiums, ask for a reevaluation of your rates as improvements in your health become evident and you are able to sustain better health for at least a year. Many insurance companies will consider reevaluating your rates if you ask it of them.

10. Consider term insurance for the meantime. If you are young, just starting to build your career and with a family to support, term life insurance may be best for you. You might not be able to afford the rates of a permanent life insurance policy just yet, but you can at least start securing your family’s future.


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