3 Ways to Save on Life Insurance
If you pass away without life insurance, the burden of your final expenses and the loss of your income can have a tremendous impact on your family. On the other hand, you don’t want the cost of your monthly life insurance premiums to create a financial headache while you are still alive. Fortunately, there are some ways to keep a life insurance policy that will aid your family without causing you to go broke. You can keep your premiums to a minimum by choosing the right type of plan and making yourself more appealing to insurers. Here are three tips for saving money on your life insurance policy.
Get a Term Policy
Term life insurance is good for a certain amount of time, such as 10 years or 30 years. Your beneficiary will only be able to file a claim if you die within the designated term. Because these policies don’t go on indefinitely, insurers tend to require a smaller monthly premium to maintain them. Term insurance also has a guaranteed payout, and none of your premium is invested by the insurance company into potentially high risk investments. Often times, term insurance policies also have less penalties associated with a missed payment because none of the money is placed in an investment. You can also usually avoid yearly health checks with term insurance policies to re-qualify.
Avoid Guaranteed Life Insurance if You’re Healthy
A guaranteed life insurance policy can seem appealing at first glance. You don’t have to submit to a barrage of health questions or an exam to qualify; the requirements to get a policy are fairly minimal. However, the cost of this convenience is great. The monthly premiums for a guaranteed policy are substantially higher than that of a term or even a permanent life insurance policy. If you are healthy and can get approved for a term or permanent insurance policy, you should go that route even if it does require divulging information about your health. Guaranteed policies should be reserved for those who are truly unable to get any other type of policy.
Change Your Health Habits
It’s easier said than done, but changing your weight and status as a smoker can significantly reduce what you pay in life insurance costs. If you are a smoker, you may be paying nearly double what a non-smoker pays for the exact same coverage. Likewise, reporting a healthier body mass index (BMI), may allow you to reduce your life insurance premiums. While accomplishing these feats may take some time, you can not only extend your life, but save yourself some cash on your insurance. Having these negative health factors on your medical report may make it impossible for you to qualify for anything other than a guaranteed policy.
Regardless of your health situation, you should always ask more than one company for a life insurance quote. If you have insurance through an employer, you may even consider paying for your insurance independently if you can get more coverage at a better rate than your employer’s group policy can afford.
Jeff Noble is an insurance consultant. His articles appear on insurance and personal finance blogs where he enjoys sharing his ideas. For more insurance money-saving tips, visit the link.
Category: Life Insurance
