Life insurance represents a level of financial protection for your loved ones who may be dependent on you in case the worst case scenario happens. A common misconception is that life insurance is very expensive and is only needed for high earners, but the truth is that anyone can get a million dollar plus policy for just a few bucks a month, but the sooner you start, the cheaper it becomes.
One of the most common reasons people don’t buy life insurance is because how expensive it can be. As with any other product though, there are ways to save money while still getting what you want. With the power of the internet, you can either save money on your current premium, or find a better and cheaper plan.
Be Sure to Purchase the Right Type of Life Insurance
One of the biggest factors to how much a plan costs is the type of policy you are purchasing. You need to be certain you have the right type for your particular situation. Otherwise, you’ll be spending a chunk of cash on benefits that don’t necessarily help you that much.
This is something to keep in mind even if you don’t have coverage yet. It’s important to know what you are buying before you pony up the cash. Figure out exactly what kinds of benefits or coverage that you require, and compare plans to find the cheapest that still gets you everything you want.
The simplest type of life insurance is term insurance. As the name implies, it pays out only if the person dies within the term of the policy. Level term policies stay the same throughout the duration of the policy, while decreasing term policies have lesser benefits the more years pass. There are also permanent policies, which pay a benefit when you die no matter how long that takes. These include whole life insurance, universal life insurance, or variable life insurance.
Change Your Lifestyle
A hidden cost of life insurance that younger people don’t think about is your overall health. The better your health is, the less you will pay on life insurance premiums. Not only that, but you will qualify for certain policies that you wouldn’t otherwise be able to purchase if you don’t take care of yourself.
Even if you are already paying higher premiums because of your health, things don’t have to stay that way forever. If you make changes in your life to lead a healthier lifestyle, you could see your costs go down.
Three of the biggest factors that affect life insurance cost are weight, whether you smoke or not, or if you have existing medical conditions. You don’t have to eliminate certain medical conditions entirely to see a benefit either. Just working with a doctor to keep it in check will be enough to see your costs go down. As for your weight and whether or not you smoke, eliminating unhealthy habits from your life will be highly beneficial to your well-being and your life insurance premiums.
Don’t Pay for Unneeded Coverage
As mentioned above, term life insurance is pretty simple. As you get into the other types though, you’ll come across complicated and complex plans that offer a whole slew of different benefits. It’s important to remember that more isn’t always better. Many life insurance salespeople will want you to purchase riders, which are extra benefits that can be added onto a policy.
Be sure to read the entire policy and what riders you are paying for. Otherwise, you could be shelling out valuable dollars for something that won’t benefit you at all. If you already have insurance, it may be worth it to give the whole thing another look-through to see if you can eliminate portions of it.
Some of the extras that many people pay for are:
• Accelerated death benefit rider – allows the policy holder to receive cash advances against the death benefit if diagnosed with a terminal disease
• Accidental death benefit rider – pays extra if the policy holder dies in a covered accident
• Disability income rider – provides replacement income if a disability impacts your ability to generate income
• Term conversion rider – allows a policy holder to convert part of a term insurance policy to a permanent one
• Waiver of premium rider – Waives premium payments if the policy holder becomes ill, injured, or disabled
Only you will know if a particular benefit is suited for your situation. The truth is, many people don’t use the above benefits, so examine if they are worth cutting out of your plan.
Be Willing to Shop Around
Any savvy shopper will already be aware of this advice. The more you are willing to shop around, the more likely you are to save money. It can be a lot more work, but comparing different policies will help you get a better idea of what you should be paying.
If you already have a policy but haven’t previously shopped around, this is a great time to start doing research. Remember to look for similar policies with the coverage and benefits you want, and see if you can get a lower price. The internet is a very powerful money-saving tool, and you should use it to its fullest extent. Not only will this benefit you, but it will also benefit your family in the future.
