Saving Money on Life Insurance

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Saving Money On Life Insurance
It’s tough saving money on life insurance!

Don’t get discouraged when trying to purchase affordable life insurance.  There are hundreds of companies to choose from and many methods to save money. Just watch out for purchasing very short terms and then renewing them.

It may be cheaper to purchase a longer term life insurance policy. Generally, a person purchasing term life insurance wants to cover a specific debt like a mortgage as opposed to leaving an estate to his or her heirs.

Another method to save money is to find a “No-load” or “low-load” permanent life insurance policy.

These have fewer expenses such as agent commissions and fees. Not many companies sell no-load or low-load policies and can usually only be purchased through financial advisors who charge flat fees rather than collecting commissions from insurance companies.

Also be aware that if you are healthy you may not want to pay extra for a guaranteed issue policy. “Guaranteed issue” life insurance policies require no medical exam but may ask a few basic medical questions. These policies are riskier for the insurer and are, therefore, more expensive than fully underwritten insurance policies.

Such policies are Generally purchased by people who have difficulty obtaining life insurance due to medical problems.

If you have some medical problems you’re still likely to get better life insurance rates by opting for an underwritten policy, for which you take a medical exam.

The high premiums, combined with a low face amount for the death benefit, can make guaranteed issue life insurance a less desirable option. With some of these policies, you could end up paying more in premiums after only a few years than your beneficiaries might ever receive from the death benefit.

Make sure to research life insurance quotes online.

While not all online life insurance quoting services will give you the rock-bottom price for term life insurance, they can still be a useful source of information about prices. Just remember, the more personal information you give, the more accurate your life insurance quotes will be. Your “lowest quote” should be used as a baseline for shopping around.

Make sure to improve your health. Health problems make it hard to buy life insurance. High blood pressure, diabetes and heart disease are among those conditions that can make life insurance companies pump up your rate.

If you smoke marijuana, pipes or cigars, but not cigarettes, you still should admit to being a smoker on the policy application. Insurance companies may request urine or saliva tests to check for the presence of nicotine. If you chew tobacco, you might end up paying smoker rates for your life insurance policy.

Don’t bother trying to hide smoking from life insurance carriers.

Another major health factor is weight. If you’re healthy but somewhat overweight, you will likely be quoted higher rates too.

If you have a pre-existing medical condition that could lead to higher rates, you’ll make your underwriters happier and probably get yourself lower life insurance premiums by showing your insurer a history of improving your health, taking your medications regularly and acting responsibly about your health.

Buy only what you need.  Nailing down a formula for how much life insurance is an imprecise science. You should ask yourself how much money it will take to maintain your family’s lifestyle if you were to die. Do you have money earmarked for your children’s education?

Make sure to reexamine your life insurance policy whenever you have a major life change.

Experts advise that you do an analysis annually or at least once every three years. Also, you should always reexamine your policy whenever you have a major life change. For example, if you have a new baby, you have to recalculate college education needs and child-care costs.

If you own a home, a mortgage is likely your biggest financial burden. Because your mortgage balance decreases with each payment, it’s important to include those revised figures in your calculations.

If you need additional life insurance, consider a rider as opposed to a new policy.

Just because your needs change doesn’t mean you should run out and buy a new life insurance policy. In many cases, a rider adding extra coverage to an in-force whole life insurance policy can let you expand your coverage without sacrificing your built-up cash value. Ask your agent if there’s a charge for adding a rider.

Purchase life insurance as soon as the need exists. An advantage to buying life insurance as soon as possible is that your premiums are lower. It’s just a method to saving money on life insurance. As you age, life insurance gets more expensive. Many term policies give you the option to renew your coverage at the end of the term without undergoing another medical exam.

You also can lock in premiums by buying a “level premium” policy, which means for a specific time period, say 5, 10 or 20 years, your premium rate stays the same.

An additional way to save is to pay your life insurance bill annually. Once you’ve found the best insurance policy for your needs, find out if you can save money by paying annually. Some insurers charge fees for monthly billing.

In general, the fewer payments you make over the course of the year (known as fractional premiums), the less you’ll pay overall. Also, some insurers charge less if they can transfer the premium payments directly from your checking account.

And make sure you ask for a rate reevaluation if your health improves. It’s possible to save money even after you’ve bought life insurance. Just because you’ve been put in a relatively expensive rate class doesn’t mean you’re out of luck forever.

If you’re paying higher premiums because of a specific health condition, ask your insurance company if you can apply for a rate reconsideration if your health has improved and you’ve sustained better health for at least a year.

If you’ve established a history of lowering your blood pressure, cholesterol, or any other controllable rate-increasing factors, many insurance companies will reevaluate your premiums if asked while saving money on life insurance.

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