Life insurance is something almost everyone needs, but cost can often prevent people from getting the right coverage. True, buying life insurance generally becomes more expensive as you get older. But that doesn’t mean you can’t find ways to make your policy more affordable. If you’re living without life insurance because you’re worried about cost, take a look at these money-saving tips.
Find out now: How much life insurance do you need?
1. Don’t Buy More Coverage Than You Need
Life insurance premiums are calculated based on a number of different factors. One of these factors is the size of the policy you’re taking out. The more coverage you buy, the more you’re going to pay. The first step in keeping your costs down is to figure out exactly how much insurance you need.
For example, someone who’s single, doesn’t own a home or have any dependents could do fine with just enough to cover debts or burial expenses. On the other hand, if you’ve got a sizable mortgage or you’re the sole breadwinner for your family, it’s important to have enough insurance to leave your loved ones financially secure if something should happen to you.
2. Pay Premiums Annually
It may not be easy for everyone to produce a big wad of cash all at once. However, doing just that to pay your life insurance premiums could be your best bet if you want to save on the policy. Insurers can often tack on a service fee or offer a slightly higher premium when you pay monthly or quarterly. So to avoid those costly possibilities, you could opt for one annual payment instead.
3. Stick With Term Life
You might think that all life insurance policies act the same. But there’s actually a big difference from one type of coverage to the next. Whole life policies build cash value and keep you covered as long as you pay the premiums. Term life, on the other hand, stays in effect for a set number of years. You have to renew the policy after that time period ends to maintain coverage.
Between the two, term life usually ends up cheaper than whole life. If you want to pay less for some solid coverage, you may want to choose a term life policy. You won’t get any equity value, but by investing through other avenues like a 401(k), IRA or brokerage account, you can more than make up for it.
4. Shop Around
When looking for a life insurance policy, it’s easy to get overwhelmed by all the different options out there. Your first instinct may be to just commit to the first company that makes a seemingly reasonable offer. It’s usually worth your time, however, to do some comparison shopping to see which insurer can give you the best deal. If you don’t want to get quotes from multiple companies individually, you can get a range of quotes straight from SmartAsset.
5. Stay Healthy
One of the easiest ways to keep your life insurance costs low is to simply take good care of your health. Quitting smoking, losing weight and staying physically active can all go a long way toward helping you save on coverage. If you’re in good health, it’s probably a good idea to opt for a policy that requires a medical exam. You can get out of the medical evaluation with a guaranteed policy, but the trade-off is you will often end up with a higher premium.
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