10 Ways to Save on Life Insurance

The older you get, the more you realize that life insurance isn’t optional. Unfortunately, the older you get, the more expensive it gets. These tips can help you find a life insurance policy that provides you with the coverage you need without cutting too deeply into your monthly budget.

1. Avoid Whole Life Policies

A whole life policy provides coverage from the day you sign up until the day you die. These policies are far more expensive than term life policies because there is no question that your dependents will eventually file a claim on the policy. On average, the same money spend on a whole life policy would return a lot bigger return for your heirs than a whole life policy.

2. End Term Life at the Right Time

Only buy insurance for the number of years that you will need it. A term life policy should end once your dependents no longer rely on your income. It makes the most sense to buy a policy that will cover you while your children are living at home, or while your spouse is dependent on your income. Once everyone who depended upon your income becomes self-sufficient, life insurance stops making sense.

3. Buy when you are Young

They say youth is wasted on the young. Younger people get the best insurance rates, but they are least likely to realize the importance of buying early while they can lock in lower rates. Younger individuals pose less risk of dying during the term of coverage, so they can expect to find much better deals on life insurance rates than older individuals. If you are young, healthy, and work in a relatively safe career, this is the best time in your life to purchase a life insurance policy.

4. Compare Prices before you Buy

A quick price comparison between several different life insurance companies will save you time and money once you begin shopping in earnest. Life insurance companies develop their prices based on many different factors, and each insurance company treats the factors differently. Shop around for average prices from at least three different companies so that you will have a better idea of what you should expect to pay. Look for rate discounts that you might qualify for as well.

5. Be Honest With Your Agent

Don’t fudge the facts when you are filling out a life insurance application. The insurance company can always check on your statistics once you have submitted them. It is a safe assumption that the agency will look into all of your personal details if your dependents need to file a claim while you are covered. If they discover that you were less than truthful on your application, your dependents may not be able to receive the insurance payout at all. It is better to pay a little more for the proper insurance policy today than to pay a little less and be unsure of the payout in the end.

6. Look for the Company’s Rating

Make sure you look up an insurance company’s rating through an established company like Standard & Poor’s. The third party rating system will protect you from insurance companies that have slow payout histories or other problems. Spending money on an insurance policy from a company that is not trustworthy is like throwing that money out the window each month. If you find an insurance company that has a good rating, you can feel confident that your dependents will receive the claim that they should if anything happens to you while you are covered. Most insurance companies list their ratings prominently if the ratings are good.

7. Don’t Use Life Insurance as an Investment Tool

Life insurance is not a moneymaker. It is true that you can borrow against some types of life insurance policies, but the fees you will pay can make it prohibitive to say the least. You will be far better off investing in a traditional form of savings than borrowing from your life insurance policy. Traditional lending institutions offer much better rates and investment opportunities that have more affordable taxing regulations than a life insurance policy can offer.

8. Shop Online

The internet is one of the best ways to complete your research before you buy a life insurance policy. You can visit a single website to find information about several different insurance companies at once. All you have to do is fill out one form and submit it to as many companies as you like. You will receive detailed quotes from each of the companies based on the information you provided. Once you have the reports, you can take the time to compare them side by side on your computer. Online quotes are the easiest way to narrow down your search to the companies that offer the right term policies for the best prices.

9. Buy the Right Amount of Coverage

Experts believe that the appropriate amount of coverage is the amount of salary you expect to earn over 5 to 7 years of regular working. Before you begin shopping for insurance, sit down and figure out exactly how much your policy should be worth. If you are the only breadwinner for your family, you will need to purchase a higher amount of insurance. If you know that your spouse will be able to supplement the insurance claim with a salary from his or her career, factor that salary out of your insurance costs.

10. Buy Insurance while you are Healthy

The healthier you are, the less you will pay for life insurance. If you are considering buying a policy, the best time to make the purchase is while you are healthy. Unhealthy activities, like smoking or drinking regularly, can also make your insurance costs higher. It may be worth making some lifestyle changes so that your life insurance costs can be reduced. Understand, however, that these changes need to be in effect for many years before your rates will improve.